Comparison of Islamic Banks with Conventional Banks: Evidence from an Emerging Market

Aman, Ameenullah; Sharif, Saqib; Arif, Imtiaz

doi:10.2139/ssrn.2565273

Cited by 6 publications

(16 citation statements)

References 21 publications

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“…Although conventional banks produce superior profits, liquidity and risk management over Islamic banks, it is subject to credit risk and liquidity crunch. Aman, Sharif and Arif, (2016) found that the business model of Islamic banks is inferior to the model of conventional banks. Islamic banks are less cost efficient than conventional banks.…”

Section: An Interest Rate Commission Agent Bank Fills the Gaps In Islmentioning

confidence: 99%

An Interest Rate Commission Agent Banking System

Tessema

Kruger

2015

SSRN Journal

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CHAPTER 1: INTRODUCING AN INTEREST RATE COMMISSION AGENT BANKING SYSTEM (AIRCABS) 4.5. Research participants and sample size 4.6. Sample and sampling method 4.7. AIRCABS process flow model 4.8. Material and methods 4.8.1. Measurement instrument 4.8.1.1. Measurement instruments used to collect primary data by survey questionnaires 4.8.1.2. Measures of continuous data type instruments applied in the models 4.9. Method of analysis 4.9.1. Canonical correlation 4.9.1.1. Canonical Correlation Analysis 4.9.2. Multinomial logistic regression 4.9.2.1. Multinomial logistic regressions analysis 4.9.3. Merging individuals survey respondents' perception with quantitative data analysis result 107 4.10. Chapter summary vii CHAPTER 5: TESTING PERFORMANCE OF AN INTEREST RATE COMMISSION AGENT BANKING SYSTEM (AIRCABS) 5.1. Introduction 5.2. Statistical result and analysis 5.2.1. Validity and reliability of survey instruments 5.2.1.1. The statistical result of individual perception responses on Credit risk and liquidity crunch and AIRCABS survey instruments 5.2.1.2. Factor analysis for validity of credit risk and liquidity crunch and AIRCABS survey questionnaires 5.2.1.3. Measuring investor loan funding and discrete market deposit interest incentive survey instrument using the Kuder-Richardson test 5.2.1.4. Factor analysis for validity of investor loan funding and discrete market deposit interest incentive survey questionnaires 5.3. Canonical correlation statistical result 5.3.1. Level of significance of canonical correlation 5.3.2. The magnitude of canonical correlation 5.3.3. Redundancy measure of share variances 5.3.4. Individual perception of credit risk and liquidity crunch and AIRCABS survey questionnaires 5.4. Statistical result of investor loan funding and discrete market deposit interest rate incentive 5.4.1. Model fitting information 5.4.2. Goodness-of-fit 5.4.3. Pseudo R-Square 5.4.4. Likelihood Ratio Tests viii 5.4.5. Parameter estimates 5.4.6. Classification table 5.4.7. Comparing by chance accuracy with model accuracy rate 5.4.8. Individual perception on investor loan funding and discrete market deposit interest incentive 5.5. Chapter

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Section: An Interest Rate Commission Agent Bank Fills the Gaps In Islmentioning

confidence: 99%

An Interest Rate Commission Agent Banking System

Tessema

Kruger

2015

SSRN Journal

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“…Scholars are specially supported to look for the added value of Islamic banking, so it can serve the needs of Muslim majority countries better. The study of investigating the comparative outlook of Islamic and conventional bank is needed to intensify the efforts in leading Islamic financial institution (Aman, Sharif, & Arif, 2016). Moreover, the public awakening of the Sharia enforcement makes research on improving Islamic banks become noteworthy (Abdul-Majid, Saal, & Battisti, 2010;Alghfais, 2017).…”

Section: Introductionmentioning

confidence: 99%

“…In fact, financial stability in the bank sector is very important for a country's economic development (Abrar, Ahmed, & Kashif, 2018) . Some scholars find the character in Islamic banks that makes them more stable than conventional banks (Aman, Sharif, & Arif, 2016). Beck, Kunt, & Merrouche (2013) relates Ib stability as a result of not involving in risky trading securities and interest rate.…”

Section: Introductionmentioning

confidence: 99%

“…Islamic bank was found to be more efficient than conventional bank (Alghfais, 2017). In other side, conventional banks were more efficient in managing costs than Islamic banks (Beck, Kunt, & Merrouche, 2013;Aman, Sharif, & Arif, 2016;Miah & Uddin, 2017). To measure efficiency, this study uses DEA analysis by comparing two inputs, namely loans and interest income and three inputs, namely total deposits, personnel expense and fixed asset (Said, 2013) (Rosman, Wahab, & Zainol, 2014;Sakti & Mohamad, 2018).…”

Section: Introductionmentioning

confidence: 99%

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Efficiency, Asset Quality and Stability: Comparative Study of Conventional Banks and Islamic Banks in Southeast Asia

Serly¹,

Handayani²

2020

Proceedings of the 4th Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2 2019)

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This study aims to analyze the differences in efficiency, asset quality, and stability in Islamic banks (Ib) and conventional banks (Cb) in Southeast Asia. To measure the efficiency, it uses DEA analyzing of input and output of Ib and Cb, namely input (total deposits, personnel expense, and fixed assets) and output (loans and non-interest income). Then, to test the quality of assets, this study uses Loan Loss provisions and Loan Loss Reserve. The stability is measured by calculating the Z-Score. This study aims to look at the level of efficiency, asset quality and stability in Islamic banks and conventional banks. Furthermore, this study investigates the differences of those factors to see the extent of which Islamic banks can compete with conventional banks in the Southeast Asia context. The population in this study are conventional banks and Islamic banks in Southeast Asia, namely Indonesia, Malaysia, Brunei Darussalam, the Philippines and Thailand. The type of data is secondary data obtained by Annual Report of each bank. There were 31 conventional banks and 17 Islamic banks, years 2013-2017, in Southeast Asia included in this study. The results showed that there were differences in efficiency, asset quality and stability between conventional banks and Islamic banks. Islamic banks were more efficient than conventional banks. Whereas conventional banks were better in terms of Asset quality and stability compared to Islamic banks.

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“…The importance of the development of bond market refers to the various aspects of the economy. Most importantly, the presence of the bond market in the economy reduces the over-reliance of sovereign and corporate entities on the banking system which makes them vulnerable to the financial crisis situation (Aman, Sharif, & Arif, 2016;Bhattacharyay, 2013). In fact, the financial industry of the economy becomes more efficient with the availability of the bond market in the system (Mihaljek, Scatigna, & Villar, 2002).…”

Section: Introductionmentioning

confidence: 99%

What Determines Bond Market Development? New Theoretical Insights

Aman

Naim

Isa

2019

SJOM

Self Cite

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Purpose- To diversify financing portfolio and reduce the reliance on the banking system, developing economies have realized the importance of bond market development. Bond markets facilitate economies to be more resilient towards the events of financial crises. Therefore, the share of the bond market in the financial system of the Asian economies has remarkably increased in the last decade. However, the academic literature on the bond market is very limited as compared to bank and equity markets. This was mainly because of the unavailability of vast data due to the absence of secondary markets for bonds in most of the economies. To fill this gap, this conceptual study postulates the theoretical relationships of bond market with various macroeconomic and financial factors. The study also assumes some new dimensions for bond financing and opens discussion for scholarly literature and empirical justifications. Design/Methodology- Content analysis approach is used to review relevant literature for the possible associations of the bond market with macroeconomic and financial factors. Practical Implications- The theoretical relationships discussed in the paper need empirical testing in future research to conclude policy implications. If the relationship between foreign capital and bond securities is established with empirical justification, we draw the policy that concerned authorities need to create a suitable environment for the attraction of foreign capital to provide support to the development of domestic debt market.

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Comparison of Islamic Banks with Conventional Banks: Evidence from an Emerging Market

Cited by 6 publications

References 21 publications

An Interest Rate Commission Agent Banking System

An Interest Rate Commission Agent Banking System

Efficiency, Asset Quality and Stability: Comparative Study of Conventional Banks and Islamic Banks in Southeast Asia

What Determines Bond Market Development? New Theoretical Insights

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