Predicting Future Depositor`s Rate of Return Applying Neural Network: A Case-study of Indonesian Islamic Bank

Anwar, Saiful; Watanabe, Kenji

doi:10.5539/ijef.v2n3p170

Cited by 6 publications

(2 citation statements)

References 14 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Islamic banks distribute returns to unrestricted investment deposits and shareholders, as can be calculated as returns divided on equity, solvency ratios, and returns divided on assets. According to Zakarneh (2022), all of these relationships and liquidity ratios have a significant and positive impact on the banking performance and credibility of Islamic banks.…”

Section: Literature Reviewmentioning

confidence: 99%

Examining the causal factors of banking achievements for Islamic banks in Jordanian Islamic banks: An analytical study

Khatib,

Malahim,

Khanji

et al. 2023

IJAEFA

View full text Add to dashboard Cite

This study focuses on examining the causal factors and determinants of financial banking achievements and performances for the working Jordanian Islamic Banks, including Safwa Islamic bank, International Islamic Arab Bank (IIAB), and Jordan Islamic Bank (JIB) during (2011 – 2021). The study considered the most popular measurements for financial banking performances, namely Return on Equity (ROE), Return on Assets (ROA), and dividend yield (DY) as dependent variables. Additionally, the factors of independent variables were measured by quick liquidity ratio, investments and cash to the summation of total deposits, shareholders’ equity to facilities of credit, and equity ratios. The findings showed a positive and significant influence and impact of investments and currency to the summation of aggregate deposits and equity ratio on return on equity, and a negative significant impact of shareholders’ equity on return on equity. However, there was a negative but not significant influence of liquidity (quick) ratio on ROE. Furthermore, the findings indicated a positive and significant impact of investments and currency (cash) to aggregate banking deposits and equity ratio on return on assets, but there was a negative but not significant impact for liquidity quick ratio and shareholders’ equity to credit facilities on return on assets. The liquidity (quick) ratio had a significant and negative impact on dividend yield. Although there was a positive but insignificant impact of investments and cash to the summation of total deposits and equity ratios on dividend yield, there was a greater negative and insignificant impact from shareholders’ equity to credit facilities on dividend yield.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

Examining the causal factors of banking achievements for Islamic banks in Jordanian Islamic banks: An analytical study

Khatib,

Malahim,

Khanji

et al. 2023

IJAEFA

View full text Add to dashboard Cite

show abstract

“…Also, generally, only a few limited studies used the modern data mining techniques in Islamic banking outside the purpose of predicting the financial performance; nevertheless, the only focus was on the use of neural networks technique, as Anwar et al (2012), Anwar and Mikami (2011), Anwar and Ismal (2011) and Anwar and Watanabe (2010) predicted the deposit rate of return volatility in Islamic banking of Indonesia using ANNs as the only best technique in the prediction of the volatility of the rate of return in Islamic banking.…”

Section: Literature Reviewmentioning

confidence: 99%

Data mining techniques for predicting the financial performance of Islamic banking in Indonesia

Ledhem¹

2021

JM2

View full text Add to dashboard Cite

Purpose The purpose of this paper is to apply various data mining techniques for predicting the financial performance of Islamic banking in Indonesia through the main exogenous determinants of profitability by choosing the best data mining technique based on the criteria of the highest accuracy score of testing and training. Design/methodology/approach This paper used data mining techniques to predict the financial performance of Islamic banking by applying all of LASSO regression, random forest (RF), artificial neural networks and k-nearest neighbor (KNN) over monthly data sets of all the full-fledged Islamic banks working in Indonesia from January 2011 until March 2020. This study used return on assets as a real measurement of financial performance, whereas the capital adequacy ratio, asset quality and liquidity management were used as exogenous determinants of financial performance. Findings The experimental results showed that the optimal task for predicting the financial performance of Islamic banking in Indonesia is the KNN technique, which affords the best-predicting accuracy, and gives the optimal knowledge from the financial performance of Islamic banking determinants in Indonesia. As well, the RF provides closer values to the optimal accuracy of the KNN, which makes it another robust technique in predicting the financial performance of Islamic banking. Research limitations/implications This paper restricted modeling the financial performance of Islamic banking to profitability through the main determinants of return of assets in Indonesia. Future research could consider enlarging the modeling of financial performance using other models such as CAMELS and Z-Score to predict the financial performance of Islamic banking under data mining techniques. Practical implications Owing to the lack of using data mining techniques in the Islamic banking sector, this paper would fill the literature gap by providing new effective techniques for predicting financial performance in the Islamic banking sector using data mining approaches, which can be efficient tools in business and management modeling for financial researchers and decision-makers in the Islamic banking sector. Originality/value According to the author’s knowledge, this paper is the first that provides data mining techniques for predicting the financial performance of the Islamic banking sector in Indonesia.

show abstract

The Usefulness of Financial Ratios in Discriminating Between Healthy and Distressed Companies: The Case of an Islamic Bank

Saračević¹,

Šarlija²

2017

Critical Issues and Challenges in Islamic Economics and Finance Development

View full text Add to dashboard Cite

Predicting Future Depositor`s Rate of Return Applying Neural Network: A Case-study of Indonesian Islamic Bank

Abstract:
Islamic bank has to perform well in order to deliver better return in compensating depositor`s money. This paper is conducted to identify the relative significance assigned to macro… Show more

Cited by 6 publications

References 14 publications

Examining the causal factors of banking achievements for Islamic banks in Jordanian Islamic banks: An analytical study

Examining the causal factors of banking achievements for Islamic banks in Jordanian Islamic banks: An analytical study

Data mining techniques for predicting the financial performance of Islamic banking in Indonesia

The Usefulness of Financial Ratios in Discriminating Between Healthy and Distressed Companies: The Case of an Islamic Bank

Contact Info

Product

Resources

About

Predicting Future Depositor`s Rate of Return Applying Neural Network: A Case-study of Indonesian Islamic Bank

Abstract: Islamic bank has to perform well in order to deliver better return in compensating depositor`s money. This paper is conducted to identify the relative significance assigned to macro… Show more

Cited by 6 publications

References 14 publications

Examining the causal factors of banking achievements for Islamic banks in Jordanian Islamic banks: An analytical study

Examining the causal factors of banking achievements for Islamic banks in Jordanian Islamic banks: An analytical study

Data mining techniques for predicting the financial performance of Islamic banking in Indonesia

The Usefulness of Financial Ratios in Discriminating Between Healthy and Distressed Companies: The Case of an Islamic Bank

Contact Info

Product

Resources

About

Abstract:
Islamic bank has to perform well in order to deliver better return in compensating depositor`s money. This paper is conducted to identify the relative significance assigned to macro… Show more