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The profitbility and determinants of efficiency of world Islamic banks

The paper investigates the efficiency of the Islamic banking sectors in 25 countries during the period of 1992-2009 involving 78 Islamic Banks. The efficiency estimates of individual banks are evaluated using the non-parametric Data Envelopment Analysis (DEA) method. The empirical findings seem to...

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Main Authors: Mohamad Noor, Mohamad Akbar, Ahmad, Nor Hayati
Format: Article
Language:English
Published: The International Association of Islamic Banks Karachi 2011
Subjects:
HG Finance
Online Access:http://repo.uum.edu.my/5163/1/Akh.pdf
http://repo.uum.edu.my/5163/
http://lintas.uum.edu.my:8080/elmu/index.jsp?module=webopac-l&action=fullDisplayRetriever.jsp&szMaterialNo=0000117306
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spelling my.uum.repo.51632016-04-24T04:50:48Z http://repo.uum.edu.my/5163/ The profitbility and determinants of efficiency of world Islamic banks Mohamad Noor, Mohamad Akbar Ahmad, Nor Hayati HG Finance The paper investigates the efficiency of the Islamic banking sectors in 25 countries during the period of 1992-2009 involving 78 Islamic Banks. The efficiency estimates of individual banks are evaluated using the non-parametric Data Envelopment Analysis (DEA) method. The empirical findings seem to suggest that the World Islamic banks have exhibited high pure technical efficiency. A multivariate analysis based on the Tobit model reinforces these findings which are significantly associated with operating expenses against asset, size, equity, NPL, Asia Financial Crisis and national income level (GDP). We also find positive correlation between bank profitability and technical efficiency levels, indicating that the more efficient banks tend to be more profitable with strong result at Asian Islamic banks.The profitability analysis by Fixed Effect Model (FEM) proposed that profit efficiency is positively and significantly associated with operating expenses against asset, equity, high income countries and non performing loans against total loans specifically for model 8 & 9 that positively at 1% level. Interestingly, the empirical results show that more profitable banks are those that have higher operating expenses against asset, more equity against asset and concentrated at high income countries demonstrating close relationship between monetary factors in determining Islamic banks profitability. The International Association of Islamic Banks Karachi 2011 Article PeerReviewed application/pdf en http://repo.uum.edu.my/5163/1/Akh.pdf Mohamad Noor, Mohamad Akbar and Ahmad, Nor Hayati (2011) The profitbility and determinants of efficiency of world Islamic banks. Journal of Islamic banking & finance , 28 (2). pp. 57-87. ISSN 1814-8042 http://lintas.uum.edu.my:8080/elmu/index.jsp?module=webopac-l&action=fullDisplayRetriever.jsp&szMaterialNo=0000117306
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HG Finance
spellingShingle HG Finance
Mohamad Noor, Mohamad Akbar
Ahmad, Nor Hayati
The profitbility and determinants of efficiency of world Islamic banks
description The paper investigates the efficiency of the Islamic banking sectors in 25 countries during the period of 1992-2009 involving 78 Islamic Banks. The efficiency estimates of individual banks are evaluated using the non-parametric Data Envelopment Analysis (DEA) method. The empirical findings seem to suggest that the World Islamic banks have exhibited high pure technical efficiency. A multivariate analysis based on the Tobit model reinforces these findings which are significantly associated with operating expenses against asset, size, equity, NPL, Asia Financial Crisis and national income level (GDP). We also find positive correlation between bank profitability and technical efficiency levels, indicating that the more efficient banks tend to be more profitable with strong result at Asian Islamic banks.The profitability analysis by Fixed Effect Model (FEM) proposed that profit efficiency is positively and significantly associated with operating expenses against asset, equity, high income countries and non performing loans against total loans specifically for model 8 & 9 that positively at 1% level. Interestingly, the empirical results show that more profitable banks are those that have higher operating expenses against asset, more equity against asset and concentrated at high income countries demonstrating close relationship between monetary factors in determining Islamic banks profitability.
format Article
author Mohamad Noor, Mohamad Akbar
Ahmad, Nor Hayati
author_facet Mohamad Noor, Mohamad Akbar
Ahmad, Nor Hayati
author_sort Mohamad Noor, Mohamad Akbar
title The profitbility and determinants of efficiency of world Islamic banks
title_short The profitbility and determinants of efficiency of world Islamic banks
title_full The profitbility and determinants of efficiency of world Islamic banks
title_fullStr The profitbility and determinants of efficiency of world Islamic banks
title_full_unstemmed The profitbility and determinants of efficiency of world Islamic banks
title_sort profitbility and determinants of efficiency of world islamic banks
publisher The International Association of Islamic Banks Karachi
publishDate 2011
url http://repo.uum.edu.my/5163/1/Akh.pdf
http://repo.uum.edu.my/5163/
http://lintas.uum.edu.my:8080/elmu/index.jsp?module=webopac-l&action=fullDisplayRetriever.jsp&szMaterialNo=0000117306
_version_ 1644278935660265472
score 13.211869

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