Résultats de recherche pour « Islamic banks »

Sharia compliance is essential for Islamic financial institutions. This study has two objectives, namely, to determine the level of sharia compliance in Islamic banks in Indonesia, as well as to prove whether sharia compliance affects the performance of Islamic banks in Indonesia. To prove this, the researcher observed the annual report of 11 Islamic banks in Indonesia for the period 2012 to 2016. Sharia compliance is measured through the level of sharia governance in Islamic banks. Sharia governance instruments used to refer to Hasan (2011). While ROA and ROE measure the performance of Islamic banks, content analysis is used to identify sharia governance disclosures in annual reports. The study revealed that on average, the level of sharia compliance of Islamic bank in Indonesia is at the level of best practice while the results of statistical tests prove that there is no significant effect sharia compliance on the performance of Islamic banks both measured by ROA and ROE.

This paper aims to examine the determinants of Islamic Governance Disclosure (IGD) in Islamic banks in Indonesia. The research method used is a quantitative approach involving Islamic commercial banks in Indonesia, where their annual reports can be accessed during the 2011–2018 observation period. The data collection methods used are analysis of documentation and content analysis. Content analysis was used to calculate the IGD index. Path analysis with WarpPLS software was used to analyze data. The results show that the number of members of the Sharia supervisory board had a negative and significant effect on IGD, while leverage, size, and age can influence the IGD positively and significantly. In addition, institutional ownership has a negative and significant effect on IGD. Profitability and composition of the independent board of commissioners do not significantly affect the IGD.

Southeast Asian countries, as members of the Association of Southeast Asian Nations (ASEAN), hold the second-largest Sharia financial assets globally. This study aims to assess the comparative performance of Islamic banks across ASEAN, examine the relationship between Islamic conformity, profitability, and green banking practices, and compare performance indicators between Malaysian and Indonesian Islamic banks. The sample includes Islamic banks from Indonesia, Malaysia, Brunei Darussalam, Thailand, and the Philippines. The findings reveal consistent adherence to Sharia principles across all banks, demonstrating strong Islamic conformity. However, financial performance indicators such as Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM) show significant variability, reflecting differences in operational efficiency and profitability. Green banking practices positively correlate with profitability, particularly ROA and NPM, emphasizing the role of Environmental, Social, and Governance (ESG) initiatives in enhancing operational efficiency and customer loyalty. The comparative analysis highlights that while both Malaysian and Indonesian Islamic banks exhibit consistent Islamic conformity, Malaysian banks outperform their Indonesian counterparts in green banking practices and profitability. This advantage is attributed to Malaysia’s advanced regulatory environment, which promotes sustainable finance, whereas Indonesian banks face greater profitability variability, necessitating improved governance and operational strategies. These findings offer valuable insights for policymakers and stakeholders, showcasing how Islamic financial principles can integrate with sustainability practices to achieve profitability and environmental responsibility in Islamic banking. Acknowledgment(s)The authors extend their gratitude to the Ministry of Higher Education, Science and Technology of the Republic of Indonesia for funding this research and to the Research and Community Service Centre of Universitas Mercu Buana for their valuable support.

This research analyzes the determinants of liquidity risk in Islamic banks by using a comprehensive model that incorporates several variables that impact the liquidity of Islamic banks. A panel data analysis is conducted on a sample of 42 Islamic banks from 15 countries between 2007 and 2014. The results show a negative correlation between liquidity risk and cash ratio, as the cash balance can be used to meet any demands for liquidity from the bank’s customers. There is negative correlation between liquidity risk and securities held by the bank, since banks which need liquidity can sell these assets to meet any liquidity shortages they face. Bank size also has a negative relationship with liquidity risk, as larger banks tend to have more stability and customers feel safer dealing with large banks. Bank’s equity also has a negative correlation with liquidity risk, as equity is a more stable source of funding for banks, a higher ratio of equity lowers liquidity risk. On the other hand, there is a positive relationship with high profit assets, as banks shift their portfolio towards more profitable assets in order to increase their earnings, they face greater liquidity risk, a positive relationship also exists with bad finance provision. Additionally, the findings demonstrate that the relationship between bank size and liquidity risk is not linear.

This research analyzes the determinants of bank profitability by investigating the internal factors that affect the profitability of Islamic banks and conventional banks. It then compares the results from the two types in order to understand how they differ from each other. As previous researchers focus on either Islamic or conventional banks, this research will analyze both by comparing how they are each influenced by profitability factors. Few researches have attempted to compare the profitability of Islamic and conventional banks using a relatively small sample. This research uses a fixed effect panel data analysis on a large sample of 68 banks (42 Islamic and 26 conventional banks) from 13 MENA countries, covering the period of 2006 until 2016. Using several variables, including bank size, equities to assets, loans to assets, deposits to assets, cash to assets and securities to assets, the results show that bank size, equities to assets and deposits to assets have a significant positive effect on Islamic banks’ profitability, while they have a significant negative effect on conventional banks’ profitability; loans to assets and cash to assets have no effect on bank profitability for either Islamic or conventional banks; and securities to assets has a significant negative effect on Islamic banks’ profitability, while it has a significant positive effect on conventional banks’ profitability. The results also show that bank size, equities to assets, deposits to assets and cash to assets contribute more to Islamic banks’ profitability compared to conventional banks, while loans to assets and securities to assets contribute more to conventional banks’ profitability compared to Islamic banks.

Sharia-compliant companies had to add Islamic Social Reporting when disclosing Corporate Social Responsibility information due to its characteristics. Sharia-compliant companies in Indonesia still do not do this much, and it is very interesting to study, because every sharia-based entity must comply with sharia provisions in all aspects of its activities, including when compiling social reporting. The purpose of this study is to analyze the influence of profitability, liquidity, leverage, and an Islamic Governance Score on Islamic Social Reporting in Islamic commercial banks in Indonesia. The sampling is carried out using a purposive sampling technique for up to 10 Islamic commercial banks with a six-year observation period, so there are 60 units of analysis. The data are collected using a documentation technique. The analysis in the study uses panel data regression. Based on a Random Effect Model, the study showed that profitability and leverage do not affect Islamic Social Reporting, while liquidity and the Islamic Governance Score had an impact on the Islamic Social Reporting.

Type of the article: Research ArticleAbstractThis paper empirically analyzes the influence of the Shariah Supervisory Board (SSB) and its characteristics on the disclosure of the Islamic Corporate Ethical Identity (ICEI) among 42 Islamic banks in Qatar, Indonesia, Saudi Arabia, Malaysia, the United Arab Emirates, and Turkey (collectively referred to as QISMUT) during the period 2019–2023. The study employs text analysis to measure the extent to which ICEI information is disclosed in these banks’ annual reports, demonstrating a significant increase in such disclosures over the analyzed period.The study utilizes descriptive statistics to provide a foundational understanding of the trends in ICEI reporting. Furthermore, it applies multiple regression analysis to ascertain the relationship between SSB characteristics and ICEI disclosures, controlling for variables such as bank size, financial performance, and economic performance. The findings reveal significant disparities in ICEI disclosure rates, with Turkey exhibiting the lowest levels and Saudi Arabia the highest. This variation indicates a notable deficiency in the emphasis on ICEI among Islamic banks within the region. Additionally, the study highlights a positive correlation between SSB characteristics and ICEI disclosure levels. Banks with larger SSBs, possessing diverse expertise, intellect, and reputable credentials, tend to show higher ICEI disclosure levels. This suggests that effective SSBs enhance the governance of Islamic banks, promoting adherence to Islamic ethical standards. However, intriguingly, the study finds a significant impact of ICEI disclosure on the financial performance of these banks. In conclusion, Islamic banks should strengthen governance and improve communication about ICEI disclosures to enhance transparency, accountability, and alignment with Islamic values, boosting financial performance.

This study examines the degree of the corporate risk disclosure and its impact on the banking performance using annual data of banks listed on the UAE financial markets: Abu Dhabi Stock Exchange (ADX) and Dubai Financial Market (DFM) during the period 2003–2013. The authors conduct the content analysis of the annual reports to measure the degree of the corporate risk disclosure. In addition, they use the panel data regressions to analyze the impact of the corporate risk disclosure on the performance of the banks. The results show low degree of the overall corporate risk disclosure index, strategic risk disclosure index, operational risk disclosure index, damage risk disclosure index, and risk management disclosure index for UAE listed banks. In addition, the results reveal significant differences in the overall corporate risk disclosure, strategic risk disclosure, financial risk disclosure, and risk management disclosure between conventional and Islamic banks. However, the effect of the degree of the overall corporate risk disclosure on the performance of UAE bank has been found insignificant. The findings of this paper contribute by providing a better understanding of risk disclosure practices in UAE and help the banks to optimally disclose their risk, improve the quality of their disclosure practices and enhance the quality of their financial reports. The impact of the corporate risk disclosure on the performance of the banks has not been examined by any of the prior researches. In addition, this paper examines the potential difference between Islamic and conventional banks in their corporate risk disclosure practices.

The purpose of this study is to investigate the efficiency of two different banking systems operating in Egypt (Islamic versus conventional banks). A sample of 35 banks has been used to examine the technical efficiency before and after the financial crisis using data envelopment analysis model. Evaluating the technical efficiency of Egyptian banks will enable policymakers to support which banking system is more efficient to facilitate the financial inclusion and enhance the economic development.Before the financial crisis, conventional banks outperformed conventional banks with Islamic windows and Islamic banks, scale technical efficiency outperformed pure technical efficiency when analyzing conventional banks and conventional banks with Islamic windows. In terms of Islamic banks, pure efficiency outperformed scale efficiency. After the financial crisis, technical efficiency of all banks decreased. However, pure technical efficiency of Islamic banks has improved as a result of the quality of management and outperformed both conventional banks and conventional banks with Islamic windows. These results imply that Islamic banks have not been affected by the financial crisis. Therefore, the increased adoption and support of the Islamic banks in Egypt is addressed to develop the economy and push forward entrepreneurship projects, support the financial inclusion and the informal economy integration.