Determinants of Islamic banks’ profitability: international evidence

Al-Harbi, Ahmad

doi:10.1108/imefm-12-2015-0161

Cited by 56 publications

(80 citation statements)

References 40 publications

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“…If GDP rises, it will be followed by an increase in income so that the ability to save also increases. In line with the study, our study found that GDP has significant effect on the profitability of Sharia banks [6,9,33,52,57]. That the average income of the Indonesian population has not been able to set aside their income for saving, whereas some Indonesian workers are outsourced employees with low bargaining power both in legal and income aspects, and this affects the decrease Sharia Banks Profitability.…”

Section: Discussionsupporting

confidence: 79%

“…The size of the inflation rate will affect the company's financial performance, especially in terms of profitability. The results of the study found that significant and positive inflation affects the profitability of Sharia banks in Indonesia [3,8,[30][31][32]57]. These findings illustrate that the Indonesian Muslim community despite inflation still has significant purchasing power.…”

Section: Discussionmentioning

confidence: 74%

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The Determinants of Bank Profitability: Empirical evidence from Indonesian Sharia Banking Sector

Supiyadi¹,

Arief²,

Nugraha³

2019

Proceedings of the 1st International Conference on Economics, Business, Entrepreneurship, and Finance (ICEBEF 2018)

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This paper aims to examine the internal and external determinants of sharia banks profitability in Indonesia over the period 2010-2017. The bank profitability is measured by return on assets (ROA) as a function of bank-internal and external determinants. Using balances data set and fixed effect model, the empirical results have found strong evidence that both internal and external factors have a strong influence on the profitability. The internal factors of the bank i.e., capital adequacy, credit risk, and asset size have a significant and negatif effect on bank profitability, while liquidity have a positive and significant impact on banks profitability. However, the external factors only inflation has a significant and positive effect, while GDP has a negatif and significant effect on banks profitability. This result suggest that banks can improve their profitability through increasing banks liquidity, reinforce their capital structure, reduce their assets sizes and credit risk, in addition banks should be anticipate the external factors, thus sharia banks will be more competitive than conventional banks.

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Section: Discussionsupporting

confidence: 79%

Section: Discussionmentioning

confidence: 74%

The Determinants of Bank Profitability: Empirical evidence from Indonesian Sharia Banking Sector

Supiyadi¹,

Arief²,

Nugraha³

2019

Proceedings of the 1st International Conference on Economics, Business, Entrepreneurship, and Finance (ICEBEF 2018)

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“…The regression coefficient X1 of 0.001787 implies that for every increase in X1 of one unit it will increase the ROA of 0.001787 and vice versa. The results of this study support Alharbi [16] which states that banks with large capital are safer than banks with low capital ratios because they have access to cheaper and less risky sources of funds, which leads to increased profitability. b.…”

Section: Hypothesis Test (T-test)supporting

confidence: 76%

Determinants of Islamic Banks’ Profitability in Indonesia

Rini¹,

Burhany²

2020

Proceedings of the Proceedings of the 1st International Conference on Management, Business, Applied Science, Engineering and Su

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This research aims to examine the determinants of Islamic Banks' profitability in Indonesia, consisting of internal and external factors. The research method is descriptive verificative. The research sample is 12 Islamic Commercial Banks that publish their financial statements for period 2013-2017. Data research is secondary data that is the annual financial reports published by Bank Indonesia and Financial Services Authority or OJK for variables CAR, NPF, BOPO, FDR; the annual Islamic Commercial Bank report for variable ROA; the annual report of Bank Indonesia and Indonesian Central Bureau of Statistics for variables BI Rate and Inflation. This panel data, a combination of cross-section and time series, analyzed using regression analysis method. The study result found that internal factors CAR and NPF have positive effect on ROA, while BOPO and FDR have negative effect on ROA. Meanwhile, external factors BI Rate and Inflation have no effect on ROA.

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“…This indicates that high oil prices increase Islamic banks profitability leading to higher rate of return on deposits. This positive effect of high oil prices on Islamic banks performance documented by Chowdhury & Rasid (2016) and Alharbi (2017) study.…”

Section: Discussion Of Resultsmentioning

confidence: 59%

“…The studies conducted by Sufian (2012), Al-Awawdeh & Al-Sakini (2017) and Alharbi (2017) linked banks' profitability to OBS activity. The result of foreign ownership is positive and significant at level of 10 percent.…”

Section: Discussion Of Resultsmentioning

confidence: 99%

The Determinants the Rate of Return on Deposits in Islamic Banks

Al-Harbi¹

2020

JFIB

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This article aims to identify the determinates of the rate of return on deposits in Islamic banks. The study, according to the best of my knowledge, is the first study to investigate the factors affecting the rate of return in Islamic banks using cross-country data with a large sample of banks and for a prolonged period. To achieve its aim, the author used data from almost all Islamic banks in the world for a 20-year period (1989)(1990)(1991)(1992)(1993)(1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008). The data were analyzed using a two-way fixed-effect model. The empirical results demonstrate that capital adequacy (default risk), credit risk, age, economic growth, and concentration significantly and negatively influenced the return on deposits in Islamic banks. The results also suggest that foreign ownership, size, inflation, and oil prices had significant and positive effects on the rate of return. Moreover, the results indicated that deposit insurance (positive), interest rates (positive), and deposit growth (negative) are not determinants of the rate of return in Islamic banks.

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Determinants of Islamic banks’ profitability: international evidence

Cited by 56 publications

References 40 publications

The Determinants of Bank Profitability: Empirical evidence from Indonesian Sharia Banking Sector

The Determinants of Bank Profitability: Empirical evidence from Indonesian Sharia Banking Sector

Determinants of Islamic Banks’ Profitability in Indonesia

The Determinants the Rate of Return on Deposits in Islamic Banks

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