A net stable funding ratio for Islamic banks and its impact on financial stability: An international investigation

Ashraf, Dawood; Rizwan, Muhammad; L’Huillier, Barbara

doi:10.1016/j.jfs.2016.06.010

Cited by 88 publications

(73 citation statements)

References 35 publications

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“…The second hypothesis which assumes that profit sharing financing Ratio (PFR) has a positive effect on ROA is acceptable, because from the result of t test the variable of ISIR has probability value equal to variable PFR has probability value equal to 0,0224 smaller than significance 0,05 meaning if profit sharing financing ratio increases then profitability also increases. This is consistent with [3,5,10] study which has proven the effect of profit sharing financing ratio on the performance of sharia banking. So it can be concluded that Profit Sharing Financing Ratio positively affect the profitability of sharia banks Meanwhile, the PDR variable has a probability value of 0.0705 greater than the significance of 0.05 (0.0705> 0.05) and so H0be accepted.…”

Section: Resultssupporting

confidence: 92%

“…The study shows a positive relationship between profit sharing financing ratio with the profitability of sharia bank such as [3,6,7] which proved the influence of profit sharing financing ratio on profitability of sharia bank. So it can be concluded that profit sharing financing ratio positively affects the profitability of sharia banking.…”

Section: Profit Sharing Financing Ratiomentioning

confidence: 93%

“…This is because Islamic income ratio is the income of sharia bank which is according to sharia principle that is income derived from mudharabah and musyarakah financing, where if this income increase it will have chance to increase profitability [6]. The study shows positive between Islamic income ratio and the profitability of sharia banking, among others [3,6,7] which proved the influence of Islamic income ratio on bank profitability. It can be concluded that the ratio of Islamic income ratio has a positive effect with the health of sharia banking.…”

Section: B Islamic Income Ratiomentioning

confidence: 99%

“…Issues related to the sustainability of Islamic bank and the ability of banks to mobilize savings, manage risks and facilitate transactions (intermediary) are less attention in the literature. Few studies have focused on the implications of bank policy to leave interest [3]. But few have examined the influence of Islamic finance ratio on the profitability of Islamic bank.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

The Effect of Islamic Financial Ratio of Profitability

Dahlifah¹,

Sunarsih²

2019

Proceedings of the 5th Annual International Conference on Accounting Research (AICAR 2018)

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This study aims to determine the influence of Islamic income ratio, profit sharing financing ratio, profit sharing funding ratio and zakat performance ratio to the profitability of Islamic bank in Indonesia. This study uses model of multiple linear regression hypothesis test data panel. The population in this study is 12 Islamic bank which listed in Bank of Indonesia (BI) year 2013-2016. The sample in this study based on purposive sampling technique, selected 8 Islamic bank in Indonesia that publish annual financial statements in 2013-2016. Data used in this study is secondary data form. The study results proved: (1) Islamic income ratios significantly influence profitability Islamic bank in Indonesia; (2) Profit Sharing Financing Ratio significantly influences the profitability of Islamic bank in Indonesia; (3) Profit Sharing Funding Ratio not significantly affects the profitability of Islamic bank in Indonesia and (4) Zakat Performance Ratio no significant effect to the health of Islamic bank in Indonesia. Keywords-islamic finance ratio; islamic bankIn the sampling using the technique of purposive sampling with the following characteristics: 1) Banks that have gone public, 2) Has published its financial reports to the Financial

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Section: Resultssupporting

confidence: 92%

Section: Profit Sharing Financing Ratiomentioning

confidence: 93%

Section: B Islamic Income Ratiomentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

The Effect of Islamic Financial Ratio of Profitability

Dahlifah¹,

Sunarsih²

2019

Proceedings of the 5th Annual International Conference on Accounting Research (AICAR 2018)

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“…Moin (2013), evaluating the financial performance of banks in Pakistan during the period [2003][2004][2005][2006][2007], found that Meezan Bank tended to be less profitable, more solvent, and less resourceful in comparison to the conventional banks. Ashraf, Rizwan, and L'Huillier (2016) examined the impact of the net stable funding ratio on the financial stability of 136 Islamic banks operating in 30 jurisdictions. They included several bank, country, and market specific variables into the specification while examining the effects of the net stable funding ratio.…”

Section: Empirical Evidence On Banks' Solvencymentioning

confidence: 99%

Impacts of Inflation and Interest Rate Uncertainty on Performance and Solvency of Conventional and Islamic Banks in Pakistan

Rashid

Khalid²

2017

J. Islam. bus. manag.

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Abstract. This paper examines the effects of inflation and real interest rate uncertainty on the performance and solvency of banks in Pakistan. It also examines whether the effect of both types of uncertainty differs for conventional and Islamic banks. Annual data covering the period 2008-2015 for a sample of 25 banks are used to carry out the empirical analysis. Generalized Least Square (GLS) estimator is applied to overcome the problem of heteroscedasticity. The results indicate that several bank-specific variables are important in determining the performance and solvency of banks operating in Pakistan. The results also show that these variables have considerable differential impacts on the financial performance and solvency of both conventional and Islamic banks. With regard to the effects of macroeconomic variables, the results show that the rate of inflation, the interest rate, and their volatility also have quite different effects on the performance and solvency of conventional and Islamic banks. We find that although neither inflation nor interest rate uncertainty significantly affect the solvency of conventional banks, the solvency of Islamic banks is significantly affected by both types of uncertainty. Specifically, we find that inflation uncertainty has a negative, whereas, the uncertainty associated with the real interest rate has a significant positive impact on the solvency of Islamic banks. However, both types of uncertainty have a statistically insignificant effect on the financial performance of both conventional and Islamic banks in Pakistan. Providing significance evidence on the bank-specific empirical determinants, our analysis helps bank managers to improve their banks' financial performance and solvency. Further, our findings are helpful for understanding how the financial performance and financial soundness of conventional and Islamic banks are determined during periods of heightened inflation and real interest rate uncertainty.

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Are bank risk disclosures informative? Evidence from debt markets

et al. 2020

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This study examines whether financial reporting with a specific focus on risk disclosures have a predictive (informative) effect on banks' credit ratings (BCRs) and, consequently, ascertains whether governance structures can moderate such an association. Using one of the largest bank‐level datasets collected from 12 Middle East and North African (MENA) countries over the 2006–2013 period to‐date, our findings are as follows. First, we find that risk disclosures have a predictive effect on BCRs. Second, we find that the relationship between risk disclosures and BCRs is contingent on the quality of governance structures. Specifically, we find that the informativeness of risk disclosures on BCRs is higher in banks with larger board size, greater independence, higher government ownership, and better Shariah supervisory board, but lower in banks with greater block ownership, higher foreign ownership and the presence of CEO duality. The central tenor of our findings remains unchanged after controlling for a number of firm‐ and country‐level factors, alternative risk disclosure measures, firm‐ and national‐level governance proxies, different types of banks, and potential endogeneities. The findings have important implications for investors, especially bondholders, standard‐setters, regulators, and central governments.

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A net stable funding ratio for Islamic banks and its impact on financial stability: An international investigation

Cited by 88 publications

References 35 publications

The Effect of Islamic Financial Ratio of Profitability

The Effect of Islamic Financial Ratio of Profitability

Impacts of Inflation and Interest Rate Uncertainty on Performance and Solvency of Conventional and Islamic Banks in Pakistan

Are bank risk disclosures informative? Evidence from debt markets

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