Shaikh, Salman (2013): Determinants of Islamic Banking Growth in Pakistan. Forthcoming in: Journal of Islamic Economics, Banking & Finance , Vol. 10, No. 1 (1 January 2014)
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Abstract
This study analyzes the banks’ internal factors to study the determinants of profitability and assets growth. The study also investigates empirically the reasons why Advance to Deposits Ratio (ADR) is low in Islamic banking. Both descriptive and inferential techniques have been used. This is the first inferential study analyzing determinants of profitability in Islamic banks using panel data for the period 2007-12. The results are consistent with theory and other studies conducted in other countries. We find that net markup income is positively associated with expense and assets and negatively with NPLs (Non Performing Loans). Finance to deposits ratio is positively associated with NPL to net income, net markup income and expense to net markup income. Our results suggest that assets growth is positively related with profitability ratios and is also positively influenced by deposits growth.
Item Type: | MPRA Paper |
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Original Title: | Determinants of Islamic Banking Growth in Pakistan |
Language: | English |
Keywords: | Islamic Banking, Credit Risk, Bank Profitability, Bank Liquidity, Bank Solvency, ADR, NPL, CAR |
Subjects: | E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages |
Item ID: | 53798 |
Depositing User: | Dr. Salman Ahmed Shaikh |
Date Deposited: | 20 Feb 2014 12:33 |
Last Modified: | 26 Sep 2019 11:21 |
References: | Adel Ahmed, (2010) "Global Financial Crisis: An Islamic Finance Perspective", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 3 (4), pp.306 – 320. Bashir, A. Hameed (2003), “Determinants of Profitability in Islamic Banks: Some Evidence from the Middle East”, Islamic Economic Studies, Vol. 11 (1), pp. 33 – 57. Bashir, A. Hameed (1999), “Risk & Profitability Measures In Islamic Banks: The Case of Two Sudanese Banks”, Islamic Economic Studies, Vol. 6 (2), pp. 1 – 24. Haron, Sudin (2004), “Determinants of Islamic Bank Profitability”, Global Journal of Finance and Economics, Vol 1(1). Hassan, M. Kabir (2003), “Determinants of Islamic Banking Profitability”, ERF Paper, Vol. 10, pp. 3-31. Kablan, Sandrine & Yousfi, Ouidad (2011), “Performance of Islamic Banks across the World: An empirical analysis over the period 2001-2008", MPRA Paper 28695, University Library of Munich, Germany. Mokhtar, H.S.A et al. (2006), “Efficiency of Islamic Banking in Malaysia: A Stochastic Frontier Approach”, Journal of Economic Cooperation Among Islamic Countries, Vol 27 (2), pp. 37 – 70. State Bank of Pakistan [2011]. Islamic banking Bulletin, Issue 3, Karachi. State Bank of Pakistan [2012]. Financial Stability Review, for 2nd Half 2011, Karachi. Tahir, I. Mohammad & Haron, Sudin (2010) Cost and profit efficiency of Islamic banks: international evidence using the stochastic frontier approach, Banks and Bank Systems, Volume 5 (4), pp. 78 – 83. Yudistira, Donsyah (2003). Efficiency in Islamic Banking: an Empirical Analysis of 18 Banks. Department of economics, Loughborough University. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/53798 |