An Empirical Investigation of the Profitability of Islamic Banks in Bangladesh

Abu Hanifa Md. Noman
Abu Hanifa Md. Noman * §
Contact
§ University of Malaya, Malaysia

Send Message

To: Author

An Empirical Investigation of the Profitability of Islamic Banks in Bangladesh

Article Fingerprint

ReserarchID

MBRU05QI

An Empirical Investigation of the Profitability of Islamic Banks in Bangladesh Banner

AI TAKEAWAY

Connecting with the Eternal Ground
Access Review Comments
  • English
  • Afrikaans
  • Albanian
  • Amharic
  • Arabic
  • Armenian
  • Azerbaijani
  • Basque
  • Belarusian
  • Bengali
  • Bosnian
  • Bulgarian
  • Catalan
  • Cebuano
  • Chichewa
  • Chinese (Simplified)
  • Chinese (Traditional)
  • Corsican
  • Croatian
  • Czech
  • Danish
  • Dutch
  • Esperanto
  • Estonian
  • Filipino
  • Finnish
  • French
  • Frisian
  • Galician
  • Georgian
  • German
  • Greek
  • Gujarati
  • Haitian Creole
  • Hausa
  • Hawaiian
  • Hebrew
  • Hindi
  • Hmong
  • Hungarian
  • Icelandic
  • Igbo
  • Indonesian
  • Irish
  • Italian
  • Japanese
  • Javanese
  • Kannada
  • Kazakh
  • Khmer
  • Korean
  • Kurdish (Kurmanji)
  • Kyrgyz
  • Lao
  • Latin
  • Latvian
  • Lithuanian
  • Luxembourgish
  • Macedonian
  • Malagasy
  • Malay
  • Malayalam
  • Maltese
  • Maori
  • Marathi
  • Mongolian
  • Myanmar (Burmese)
  • Nepali
  • Norwegian
  • Pashto
  • Persian
  • Polish
  • Portuguese
  • Punjabi
  • Romanian
  • Russian
  • Samoan
  • Scots Gaelic
  • Serbian
  • Sesotho
  • Shona
  • Sindhi
  • Sinhala
  • Slovak
  • Slovenian
  • Somali
  • Spanish
  • Sundanese
  • Swahili
  • Swedish
  • Tajik
  • Tamil
  • Telugu
  • Thai
  • Turkish
  • Ukrainian
  • Urdu
  • Uzbek
  • Vietnamese
  • Welsh
  • Xhosa
  • Yiddish
  • Yoruba
  • Zulu
Font Type
Font Size
Font Size
Bedground

Abstract

The paper aims at investigating the effect of bank specific and macroeconomic determinants on profitability of seven Islamic banks in Bangladesh during 2003 to 2013. The study uses pool regression model and system GMM in the investigation process. The study considers ROAA, ROAE and NIM while ROAA is found more preferred profitability indicator for the Islamic banks in Bangladesh. The study reveals a robust negative effect of credit risk, loan ratio, cost efficiency and capitalization on profitability while robust positive effect bank size on profitability of the Islamic banks in Bangladesh. The study further finds that implementation of Basel II accord does not increase profitability of the Islamic bank in Bangladesh. The study suggests some significant policy recommendation in order to improve the profitability of the Islamic banks in Bangladesh.

References

52 Cites in Article
  1. Abu Ahmad,M Hassan (2007). Regulation and performance of Islamic banking in Bangladesh.
  2. H Al-Omar,A Al-Mutairi (2008). Bank-Specific Determinants of Profitability: The case of Kuwait.
  3. Manuel Arellano,Stephen Bond (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations.
  4. Rima Ariss (2010). Competitive conditions in Islamic and conventional banking: A global perspective.
  5. Panayiotis Athanasoglou,Sophocles Brissimis,Matthaios Delis (2008). Bank-specific, industry-specific and macroeconomic determinants of bank profitability.
  6. T Beck,A Demirgüç-Kunt,O Merrouche (2013). Islamic vs. conventional banking: Business model, efficiency and stability.
  7. A Berger (1995). The relationship between capital and earnings in banking.
  8. Richard Blundell,Stephen Bond (2000). GMM Estimation with persistent panel data: an application to production functions.
  9. Chan,E Koh (2015). The impact of foreign Shareholdings and originating countries on Banking sector efficiencies.
  10. Y Chan (2004). Biostatistics 202: logistic regression analysis.
  11. A Chaplinska (2012). Evaluation of the borrower’s creditworthiness as an important condition for enhancing the effectiveness of lending operations.
  12. Sheng-Hung Chen,Chien-Chang Liao (2011). Are foreign banks more profitable than domestic banks? Home- and host-country effects of banking market structure, governance, and supervision.
  13. Beng Chong,Ming-Hua Liu (2009). Islamic banking: Interest-free or interest-based?.
  14. Fadzlan Sufian,Fakarudin Kamarudin (2012). Bank-Specific and Macroeconomic Determinants of Profitability of Bangladesh's Commercial Banks.
  15. Georgios Chortareas,Jesús Garza-García,Claudia Girardone (2012). Competition, efficiency and interest rate margins in Latin American banking.
  16. Martin Cihák,Heiko Hesse (2008). Islamic Banks and Financial Stability: An Empirical Analysis.
  17. Elena Cubillas,Nuria Suárez (2013). Bank market power after a banking crisis: Some international evidence.
  18. Marwa Elnahass,Marwan Izzeldin,Omneya Abdelsalam (2014). Loan loss provisions, bank valuations and discretion: A comparative study between conventional and Islamic banks.
  19. Yiwei Fang,Iftekhar Hasan,Katherin Marton (2014). Institutional development and bank stability: Evidence from transition countries.
  20. S Farook,M Hassan,G Clinch (2012). Profit distribution management by Islamic banks: An empirical investigation.
  21. O Felix Ayadi,E Richard,M Chijoriga,E Kaijage,C Peterson,H Bohman (2008). Credit risk management system of a commercial bank in Tanzania.
  22. M Francis (2013). Determinants of commercial bank profitability in Sub-Saharan Africa.
  23. Xiaoqing Fu,Shelagh Heffernan (2009). The effects of reform on China’s bank structure and performance.
  24. Xiaoqing Fu,Yongjia Lin,Philip Molyneux (2014). Bank competition and financial stability in Asia Pacific.
  25. Maher Hasan,Jemma Dridi (2011). THE EFFECTS OF THE GLOBAL CRISIS ON ISLAMIC AND CONVENTIONAL BANKS: A COMPARATIVE STUDY.
  26. M Hassan,A.-H Bashir (2003). Determinants of Islamic banking profitability.
  27. Shelagh Heffernan,Maggie Fu (2008). The Determinants of Bank Performance in China.
  28. C Ho,N Abd Rahman,N Yusuf,Z Zamzamin (2014). Performance of global Islamic versus conventional share indices: International evidence.
  29. Akhand Hossain (2014). Empirical relationships among money, output and consumer prices in nine Muslim-majority countries.
  30. J Johnes,M Izzeldin,V Pappas (2014). A comparison of performance of Islamic and conventional banks 2004-2009.
  31. Mohammad Kabir,Abdul Chowdhury (2012). A Comparative Analysis of Profit Rate on Deposit in Islamic Banks in Bangladesh.
  32. Feisal Khan (2010). How ‘Islamic’ is Islamic Banking?.
  33. Karim Khediri,Lanouar Charfeddine,Slah Youssef (2015). Islamic versus conventional banks in the GCC countries: A comparative study using classification techniques.
  34. T Kolapo,R Ayeni,M Oke (2012). Credit risk and commercial banks' performance in Nigeria: A panel model approach.
  35. K Kosmidou,S Tanna,F Pasiouras (2005). Determinants of profitability of domestic UK commercial banks: panel evidence from the period 1995-2002.
  36. Chien-Chiang Lee,Meng-Fen Hsieh,Shih-Jui Yang (2014). The relationship between revenue diversification and bank performance: Do financial structures and financial reforms matter?.
  37. G Liu,A Mirzaei,S Vandoros (2014). The impact of bank competition and concentration on industrial growth.
  38. O Masood,M Ashraf (2012). Bank-specific and macroeconomic profitability determinants of Islamic banks: The case of different countries.
  39. Philip Molyneux,Linh Nguyen,Ru Xie (2013). Foreign bank entry in South East Asia.
  40. James Nguyen (2012). The relationship between net interest margin and noninterest income using a system estimation approach.
  41. Dennis Olson,Taisier Zoubi (2008). Using accounting ratios to distinguish between Islamic and conventional banks in the GCC region.
  42. Shrimal Perera,Michael Skully,Zahida Chaudrey (2013). Determinants of Commercial Bank Profitability: South Asian Evidence.
  43. X Qin,P Dickson (2012). Commercial Banks Profitability Position: The Case of Tanzania.
  44. Momna Saeed,Marwan Izzeldin (2016). Examining the relationship between default risk and efficiency in Islamic and conventional banks.
  45. Roshima Said,Mazlifa Daud,Leily Radjeman,Noridah Ismail (2013). Probing Corporate Ethical Identity of Shari’ah Compliant Companies.
  46. A Samad (2004). Performance of Interest-free Islamic banks vis-à-vis Interest-based Conventional Banks of Bahrain.
  47. Abdus Samad (2008). Market structure, conduct and performance: Evidence from the Bangladesh banking industry.
  48. Klaus Schaeck,Martin Cihák (2014). Competition, Efficiency, and Stability in Banking.
  49. F Sufian (2009). Determinants of bank efficiency during unstable macroeconomic environment: Empirical evidence from Malaysia.
  50. S Wasiuzzaman,N Gunasegavan (2013). Comparative study of the performance of Islamic and conventional banks: The case of Malaysia.
  51. S Wasiuzzaman,H Tarmizi (2010). Profitability of Islamic banks in Malaysia: an empirical analysis.
  52. J Zhang,C Jiang,B Qu,P Wang (2013). Market concentration, risk-taking, and bank performance: Evidence from emerging economies.
Show All References
Download References

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Abu Noman. 2015. "An Empirical Investigation of the Profitability of Islamic Banks in Bangladesh". Global Journal of Management and Business Research, Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 15 (GJMBR Volume 15 Issue C4).

More Citation Formats

Download Citation

  • Open Access
  • CC-BY-ND-NC 4.0
Download Article
Access OJS
Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords
Not Found
Classification
GJMBR-C Classification JEL Code: G21
  • Submission ReceivedFebruary 7, 2015
  • Peer Review Double Blind
    Handling Editor
  • Accepted February 28, 2015
  • Published March 15, 2015
Version of record

v1.2

Issue date
May 8, 2015

Language
English
Order Article Reprint
Experiance in AR

Explore published articles in an immersive Augmented Reality environment. Our platform converts research papers into interactive 3D books, allowing readers to view and interact with content using AR and VR compatible devices.

View in VR
Read in 3D

Your published article is automatically converted into a realistic 3D book. Flip through pages and read research papers in a more engaging and interactive format.

View in 3D
Article Matrices
Total Views: 1.2K
Total Downloads: 71
All Trends

Request Access

Please fill out the form below to request access to this research paper. Your request will be reviewed by the editorial or author team.
X

This is the heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

High-quality academic research articles on global topics and journals.

An Empirical Investigation of the Profitability of Islamic Banks in Bangladesh

Abu Noman
Abu Noman University of Malaya, Malaysia
  • Submission ReceivedFebruary 7, 2015
  • Peer Review Double Blind
    Handling Editor
  • Accepted February 28, 2015
  • Published March 15, 2015