Bank leverage and profitability: Evidence from a sample of international banks

Beltratti, Andrea; Paladino, Giovanna

doi:10.1016/j.rfe.2015.08.002

Cited by 25 publications

(17 citation statements)

References 79 publications

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“…With regard to leverage, Brigham and Ehrhardt (2005) state that when debt is used to expand firms by adding more operational assets, it can generate more cash flows, which are, in turn, expected to increase the value of ROE ratio. Additionally, Beltratti and Paladino (2015) found a positive significant relationship between leverage and profitability. Maher and Andersson (1999) believe that the quality of corporate governance, and hence, disclosure influence management's ability to increase profits through debts.…”

Section: Control Variablesmentioning

confidence: 91%

The relationship between the extent of online financial disclosure and profitability of Islamic banks

Al-Sartawi

Reyad

2019

JFRA

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Purpose This study aims to examine the relationship between online financial disclosure (OFD) and profitability of Islamic banks in the Gulf Cooperation Council (GCC) countries. Design/methodology/approach An extensive review of the literature was carried out and a checklist of 90 items (71 for content and 19 for presentation) was adopted to measure the level of OFD for the Islamic banks that are listed on the GCC stock exchanges. Additionally, the study used three indicators to measure profitability, namely, return on equity, return on assets and earnings per share. Findings The findings show that the overall OFD by Islamic banks in the GCC is 72.5 per cent, and a negative and insignificant relationship between OFD and profitability. Practical implications The study recommends that regulatory bodies should develop a guideline of disclosing information through the internet to enhance the transparency and performance among Islamic banks, which leads to reasonable economic decision-making. Originality/value The study contributes to the financial reporting and the Islamic economy literature relating to the GCC countries as previous studies gave no attention to Islamic banks.

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Section: Control Variablesmentioning

confidence: 91%

The relationship between the extent of online financial disclosure and profitability of Islamic banks

Al-Sartawi

Reyad

2019

JFRA

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“…As for control variables, this paper reviewed the literature and found several factors that might influence performance. These included bank size (Hadriche, 2015), leverage (Beltratti and Paladino, 2015), bank age (Majumdar, 1997), institutional ownership (Belkhir, 2004), and type of audit firm (Al-Sartawi and Sanad, 2015). Equation ( 1) reflects the relationship between the dependent variable (ROA) and the control variables, while Table II defines the variables under study.…”

Section: Model Development and Variable Measurementmentioning

confidence: 99%

Performance of Islamic banks

Al-Sartawi

2019

IJIF

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Purpose This paper aims to investigate the relationship between the composition of Sharīʿah supervisory boards (independence and frequency of meetings) and the performance of Islamic banks in the Gulf Cooperation Council (GCC) countries. Design/methodology/approach The study developed a multiple linear regression model, and data were collected from the annual reports of 48 standalone Islamic banks listed in the GCC countries covering the period between 2013 and 2017. Findings The results showed a statistically significant and negative relationship between the composition of the Sharīʿah supervisory boards and the performance of Islamic banks. Research limitations/implications As the current study used only one indicator, that is Return on Assets to measure performance, it is recommended to expand the framework of this study, through the addition of market-based performance indicators such as Tobin’s Q. Practical implications This study recommends the GCC countries to follow a more proactive Sharīʿah governance model to strengthen their frameworks from both regulatory and non-regulatory aspects. Originality/value The study contributes to the Sharīʿah governance and Islamic banking literature relating to the GCC countries as previous studies gave no attention to the composition of Sharīʿah supervisory boards.

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“…Our results are in line with Demirguc and Huizinga (1999). Some studies find the positive link between Z-score and technical efficiency see, for example, Beltratti and Paladino (2015); Djalilov and Piesse (2016).…”

Section: Panel Cointegration Analysismentioning

confidence: 99%

Technical Efficiency Determinants of Islamic Banks: How Do Countries Differ

Akhtar

Sheikh

Ahmad³

et al. 2021

sbsee

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Purpose: This paper analyzes the determinants of technical efficiency of Islamic banks in eight of the Islamic countries. These include Brunei Darussalam, Jordan, Indonesia, Pakistan, Malaysia, Turkey, Saudi Arabia, and the UAE. Design/Methodology/Approach: A quarterly panel data on eight Islamic countries’ banks during the period of 2014 to 2019 is used for the analysis. Findings: The overall outcomes of the study indicate that banks in KSA, UAE, and Malaysia are found to be more efficient than their counterparts in other five countries in the sample. Banks from KSA and UAE have the same average technical efficiency scores while banks in Malaysia and Jordan tend to share similar average technical efficiency scores. Findings of the study reveal that variables like bank size, return on equity, and liquid asset ratio have a positive and significant bearing while factors like GDP growth rate, Z-score, and capital adequacy ratio have a negative and significant impact on technical efficiency of Islamic banks. Implications/Originality/Value: The study puts forward some useful policy implications both for managers of banks and policymakers of countries in the sample.

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Bank leverage and profitability: Evidence from a sample of international banks

Cited by 25 publications

References 79 publications

The relationship between the extent of online financial disclosure and profitability of Islamic banks

The relationship between the extent of online financial disclosure and profitability of Islamic banks

Performance of Islamic banks

Technical Efficiency Determinants of Islamic Banks: How Do Countries Differ

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