Banking
Internal and External Factors and the Performance of Malaysian Islamic Banks
Parviz Ahangi
University of Lethbridge
Faculty of Management
Abstract
This study analyzes the effect of internal and external factors on the performance of Islamic banks in Malaysia. Additionally, this study analyzes the robustness of this effect by adding factors that represent the economic crisis of 2008 and the banks’ maturity to the analysis. This study uses the data for 16 Malaysian Islamic banks for the period of 2005-2011. The stepwise multiple regression analysis and the moderated multiple regression (MMR) analysis will be used to analyze the data.
Keywords: Islamic banking, internal banking ratios, external ratios, economic recession, conventional banking.
Contents Abstract 2 1.0. Introduction 4 1.1. Background and Motivation 4 1.2. Objectives and Implications 5 1.3. Structure 8 2.0. Literature Review 9 2.1. Studies Conducted on Conventional Banks 9 2.2. Studies Conducted on Islamic Banks 9 2.3. Studies Conducted on Malaysian Islamic Banks 13 2.4. Financial Crisis of 2008 and Islamic Banks 15 3.0. Methodology 19 3.1. Data and Procedures 19 3.2. Measures 20 3.2.1. Dependent variable. 20 3.2.2. Independent variables. 21 3.2.3. Moderator variables 26 3.3. Statistical Analysis 28 Budget 29 Timeline 29 References 30
1.0. Introduction
1.1. Background and Motivation
The concept of Islamic banking was developed in the late 1940s, based on the norms and standards of Sharia law (norms and principles retrieved from Koran). The first Islamic bank, Mit Ghamr Savings Bank, was established in 1963 in Egypt (Chachi, 2005) and since 1970 its principles have been implemented in other countries (Skinner, 2007). Currently, there are more than 300 Islamic financial institutions operating in more than 80 countries (Cevik & Charap, 2011). In 2013, the total assets of Islamic banks are expected to reach the level of US$1.8 trillion
Parviz Ahangi
University of Lethbridge
Faculty of Management
Abstract
This study analyzes the effect of internal and external factors on the performance of Islamic banks in Malaysia. Additionally, this study analyzes the robustness of this effect by adding factors that represent the economic crisis of 2008 and the banks’ maturity to the analysis. This study uses the data for 16 Malaysian Islamic banks for the period of 2005-2011. The stepwise multiple regression analysis and the moderated multiple regression (MMR) analysis will be used to analyze the data.
Keywords: Islamic banking, internal banking ratios, external ratios, economic recession, conventional banking.
Contents Abstract 2 1.0. Introduction 4 1.1. Background and Motivation 4 1.2. Objectives and Implications 5 1.3. Structure 8 2.0. Literature Review 9 2.1. Studies Conducted on Conventional Banks 9 2.2. Studies Conducted on Islamic Banks 9 2.3. Studies Conducted on Malaysian Islamic Banks 13 2.4. Financial Crisis of 2008 and Islamic Banks 15 3.0. Methodology 19 3.1. Data and Procedures 19 3.2. Measures 20 3.2.1. Dependent variable. 20 3.2.2. Independent variables. 21 3.2.3. Moderator variables 26 3.3. Statistical Analysis 28 Budget 29 Timeline 29 References 30
1.0. Introduction
1.1. Background and Motivation
The concept of Islamic banking was developed in the late 1940s, based on the norms and standards of Sharia law (norms and principles retrieved from Koran). The first Islamic bank, Mit Ghamr Savings Bank, was established in 1963 in Egypt (Chachi, 2005) and since 1970 its principles have been implemented in other countries (Skinner, 2007). Currently, there are more than 300 Islamic financial institutions operating in more than 80 countries (Cevik & Charap, 2011). In 2013, the total assets of Islamic banks are expected to reach the level of US$1.8 trillion
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