Performance Of Islamic Banking Product

This thesis examines the performance of Islamic banking financing product and its contribution to the Islamic bank's profits. Credit risk management is also analyzed to determine the comparative performance of Islamic banking and its conventional banks. Statistical observations and linear re...

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Main Author:	Mior Ahmad Jafri, Md Sabri
Format:	Thesis
Language:	eng eng
Published:	2008
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/339/1/Mior_Ahmad_Jafri.pdf https://etd.uum.edu.my/339/2/Mior_Ahmad_Jafri.pdf
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id	my-uum-etd.339
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
topic	HG Finance
spellingShingle	HG Finance Mior Ahmad Jafri, Md Sabri Performance Of Islamic Banking Product
description	This thesis examines the performance of Islamic banking financing product and its contribution to the Islamic bank's profits. Credit risk management is also analyzed to determine the comparative performance of Islamic banking and its conventional banks. Statistical observations and linear regression are used to measure the performance of key financial variables and financing contracts. These internal variables would predict its relationship with bank's profitability. Four financial ratios are used to measure the credit risk efficiency by applying t-test to financial ratios for Islamic and conventional banks. This thesis concludes that bai'bithaman ajil (BBA) and alijarah thumma albai' (AITAB) are the most financing contracts apply to the financial products. Thus, this would suggest that house financings and hire-purchase financings are the most financial products consumed by the banks consumers. BBA contract contributes most to the Maybank IBS's financial assets, while AITAB contributes most to the AMMB IBS's and Public Bank IBS's financial assets. This would also suggest that Maybank IBS's focuses on house financings, while AMMB IBS and PBB IBS focuses on hire-purchase financings. Overall Islamic banks maintain lower equity and better non-performing financings compare to mainstream banks. Equity and Base Lending Rate (BLR) are the determinants to the Islamic banks profitability. However, financing volume and financing contracts are not significantly difference to predict profitability. Thus, this study could not determine the financing products that contribute to the banks' earnings.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Mior Ahmad Jafri, Md Sabri
author_facet	Mior Ahmad Jafri, Md Sabri
author_sort	Mior Ahmad Jafri, Md Sabri
title	Performance Of Islamic Banking Product
title_short	Performance Of Islamic Banking Product
title_full	Performance Of Islamic Banking Product
title_fullStr	Performance Of Islamic Banking Product
title_full_unstemmed	Performance Of Islamic Banking Product
title_sort	performance of islamic banking product
granting_institution	Universiti Utara Malaysia
granting_department	College of Business (COB)
publishDate	2008
url	https://etd.uum.edu.my/339/1/Mior_Ahmad_Jafri.pdf https://etd.uum.edu.my/339/2/Mior_Ahmad_Jafri.pdf
_version_	1747826891951177728
spelling	my-uum-etd.3392013-07-24T12:06:47Z Performance Of Islamic Banking Product 2008-05 Mior Ahmad Jafri, Md Sabri College of Business (COB) College Of Business HG Finance This thesis examines the performance of Islamic banking financing product and its contribution to the Islamic bank's profits. Credit risk management is also analyzed to determine the comparative performance of Islamic banking and its conventional banks. Statistical observations and linear regression are used to measure the performance of key financial variables and financing contracts. These internal variables would predict its relationship with bank's profitability. Four financial ratios are used to measure the credit risk efficiency by applying t-test to financial ratios for Islamic and conventional banks. This thesis concludes that bai'bithaman ajil (BBA) and alijarah thumma albai' (AITAB) are the most financing contracts apply to the financial products. Thus, this would suggest that house financings and hire-purchase financings are the most financial products consumed by the banks consumers. BBA contract contributes most to the Maybank IBS's financial assets, while AITAB contributes most to the AMMB IBS's and Public Bank IBS's financial assets. This would also suggest that Maybank IBS's focuses on house financings, while AMMB IBS and PBB IBS focuses on hire-purchase financings. Overall Islamic banks maintain lower equity and better non-performing financings compare to mainstream banks. Equity and Base Lending Rate (BLR) are the determinants to the Islamic banks profitability. However, financing volume and financing contracts are not significantly difference to predict profitability. Thus, this study could not determine the financing products that contribute to the banks' earnings. 2008-05 Thesis https://etd.uum.edu.my/339/ https://etd.uum.edu.my/339/1/Mior_Ahmad_Jafri.pdf application/pdf eng validuser https://etd.uum.edu.my/339/2/Mior_Ahmad_Jafri.pdf application/pdf eng public masters masters Universiti Utara Malaysia Abdus Samad. (2004). "Performance of Interest-Free Islamic Banks Vis-A-Vis Interest- Based Conventional Banks of Bahrain". IIUM Journal of Economics and Management, Vol. 12. No. 2. Abdus Samad and M. Kabir Hassan. (2000). "The Performance of MaIaysian Islamic Bank During 1984-1997: An Exploratory Study". International Journal of Islamic Financial Services, Vol. 1. No. 3. Alsadek H. Gait and Andrew C. Worthington. (2007/2008). "An Empirical Survey of Individual Consumer, Business Firm and Financial Institution Attitudes towards Islamic Methods of Finance". Working Papers Series, School of Accounting and Finance, University of Wollongong. Bakarudin Ishak. (2006). "Islamic Banking and Finance: Malaysia's Experience and Achievements". Islamic Banking and Takaful Department, Bank Negara Malaysia. Bashir A. 2000. "Assessing the Performance of Islamic Banks: Some Evidence from the Middle East". Paper presented at the ERF 8th meeting in Jordan. Bourke, P. 1989. "Concentration and Other Determinants of Bank Profitability in Europe, North America and Australia". Journal of Banking and Finance. 13:65-79. Demerguc-Kunt A. and H. Huizinga. 1998. "Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence". World Bank Economic Review. Vo1.13: 379-408. Humayon A. Dar. (2004). "Demand for Islamic Financial Services in the UK: Chasing a Mirage?'Department of Economics, Loughborough University. Failaka International, Inc.. "Why Islamic Finance?'. www. failaka. com. Irene Bjorklund and Lisbeth Lundstrom. (2004). "Islamic Banking: An Alternative System". The Department of Business Studies, Kristianstad University. December 2004. Fadzlan Sufian. (2007). "The Efficiency of Islamic Banking Industry in Malaysia: Foreign vs. Domestic Banks". Humanomics. Vol. 23. No. 3. pp. 174-192. Emerald Group Publishing Limited. Kader, R. (1995). "Bank Islam Malaysia: Market Implications". in Al-Harran, S. (Ed.). Leading Issues in Islamic Banking. Petaling Jaya. Pelanduk Pulications. M. Kabir Hassan. (1999). "Islamic Banking in Theory and Practice: The Experience of Bangladesh". Managerial Finance. Vol. 25. No. 5. pp. 60-1 13. Mohamed Ariff. (1988). "Islamic Banking". Asian-Pacific Economic Literature. Vol. 2. No. 2 (September 1988). pp. 46-62. Mohammed Obaidullah. (2005). "Rating of Islamic Financial Institutions, Some Methodological Suggestions". King Abdul Aziz University, Jeddah. Saudi Arabia. Scientific Publishing Centre. Saiful Azhar Rosly and Mohd Afandi Abu Bakar. (2003). "Performance of Islamic and Mainstream Banks in Malaysia". International Journal of Social Economics. Vol. 30. No. 12. pp. 1249-1265. Sayyid Tahir. (2007). "Islamic Banking Theory and Practice: A Survey and Bibliography of the 1995-2005 Literature". Journal of Economic Cooperation. Vol. 28. No. 1. pp. 1-72. Smirlock, M. (1985). "Evidence on the (Non) Relationship Between Concentration and Profitability in Banking". Journal of Money, Credit, and Banking 17.69-83. Tarek S. Zaher and M. Kabir Hassan. (2001). "A Comparative Literature Survey of Islamic Finance and Banking". Financial Markets, Institutions and Instruments. University Salomon Centre, New York. Vol. 10. No. 4. November 2001. Blackwell Publishers. Zamir Iqbal. (1997). "Islamic Financial Systems". Finance and Development. June 1997. Analysis: Looking Through the Islamic Window: http://www.newhorizon-islamicbanking.com/index.October 1,2007. Government Investment Issues: http://www.mifc.com/0601._ib.htm. January, 2006. Islamic Banking Concepts: http://mw.mifc.com/060102_concepts-htm. August 1,2007. List of Financial Institutions Offering Islamic Banking Services: http://www.mifc.com/060103_list_ib.htm. January 7,2008. Overview of Islamic Banking in Malaysia: http://www.mifc.com/060101_ib_overview.htm. August 1,2007. Range of Islamic Banking Products and Services in Malaysia: http://www.mifc.com/060104_ibprodsenr.htm. November 1,2006.

Performance Of Islamic Banking Product

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