The influence of the internal governance factors and the moderation effects of investment account holders on lending portfolio composition of Islamic banks in the GCC region
This study examined the relationship of board of directors' characteristics, Shariah supervisory board attributes and ownership structure with the lending portfolio composition of Islamic banks in the (GCC) region, and the moderating effects of investment account holders (IAHs) on these relatio...
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| Format: | Thesis |
| Language: | eng eng eng |
| Published: |
2023
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| Online Access: | https://etd.uum.edu.my/11154/1/Depositpermission-Embargo%2024mth_s902806.pdf https://etd.uum.edu.my/11154/2/s902806_01.pdf https://etd.uum.edu.my/11154/3/s902806_02.pdf |
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| Summary: | This study examined the relationship of board of directors' characteristics, Shariah supervisory board attributes and ownership structure with the lending portfolio composition of Islamic banks in the (GCC) region, and the moderating effects of investment account holders (IAHs) on these relationships. This study employed 235 annual observations with data collected from 24 full-fledged Islamic banks listed on stock exchanges in the (GCC) region over the periods 2010-2019. Using the 'generalized least squares' (GLS) method, this study utilized two regression tests: multiple regression and hierarchical moderated multiple regression. The multiple regression results reveal that different internal governance factors have different effects on the lending portfolio composition of Islamic banks. The results show that board independence, Shariah board expertise, managerial ownership and family ownership have a significant positive relationship with lending portfolio composition, leading to a more diversified lending portfolio in Islamic banks. Meanwhile, board size has a significant negative relationship with lending portfolio composition, resulting in a more concentrated lending portfolio in Islamic banks. The hierarchical moderated multiple regression results reveal that IAHs have a significant positive moderating effect on the relationship of managerial ownership and family ownership with the lending portfolio composition of Islamic banks. However, it has a significant negative moderating effect on the relationship of board size, board independence, number of board committees, Shariah board size, Shariah board cross-membership, Shariah board education level and institutional ownership with the lending portfolio composition of Islamic banks. Overall, the findings of this study imply that greater board independence, higher Shariah board expertise, and higher managerial and family ownership will increase the diversification of the lending portfolio composition of Islamic banks. The findings also suggest that IAHs should be considered by regulators in the (GCC) region to be incorporated into the internal governance structure of Islamic banks. |
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