A Study On The Cost And Profit Efficiency Of Islamic And Conventional Bank Islamic Windows In Oman: A Proposed Framework
Objective: This study aims to analyze the efficiency of Islamic and conventional banks and their respective Islamic windows in Oman in terms of costs and profits. Theoretical Framework: The research employs a framework that examines cost and profit efficiency within the banking sector, contrastin...
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| Format: | Article |
| Language: | en |
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RGSA
2024
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| Online Access: | http://eprints.uthm.edu.my/12341/1/J17756_efc438ff3068c48ede36bea8a6094167.pdf http://eprints.uthm.edu.my/12341/ https://doi.org/10.24857/rgsa.v18n2-102 |
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| author | Al Asmi, Ali Musallam Sulaiman Abdullah, Mohd Fahmy Sieng, Lai Wei |
| author_facet | Al Asmi, Ali Musallam Sulaiman Abdullah, Mohd Fahmy Sieng, Lai Wei |
| author_sort | Al Asmi, Ali Musallam Sulaiman |
| building | UTHM Library |
| collection | Institutional Repository |
| content_provider | Universiti Tun Hussein Onn Malaysia |
| content_source | UTHM Institutional Repository |
| continent | Asia |
| country | Malaysia |
| description | Objective: This study aims to analyze the efficiency of Islamic and conventional banks and their respective Islamic
windows in Oman in terms of costs and profits.
Theoretical Framework: The research employs a framework that examines cost and profit efficiency within the
banking sector, contrasting the performance of full-fledged Islamic banks and Islamic windows of conventional
banks. This framework also investigates the impact of bank-specific variables on efficiency levels.
Method: Using empirical data from the Omani banking sector, the study quantifies efficiency by analyzing bankspecific variables such as capitalization, profitability, operational costs, and loan activity. The comparison includes
both Islamic banks and the Islamic windows of conventional banks as of the end of the third quarter of 2022.
Results and Discussion: The findings reveal that, overall, banks in Oman are more efficient at generating profits
than controlling costs. Conventional banks, on average, demonstrate higher efficiency in both cost and profit
metrics compared to Islamic banks. There exists a positive correlation between both types of efficiencies and
factors like bank capitalization and profitability, while a negative correlation is evident with operational costs.
Furthermore, increased loan activity is associated with higher profit efficiency but adversely affects cost efficiency.
Research Implications: These results underscore significant efficiency disparities between Islamic and
conventional banking sectors. They highlight the need for Islamic banks to enhance their cost management
strategies without compromising profit generation, leveraging the benefits derived from their association with
parent conventional banks.
Originality/Value: The study contributes to the literature by providing a comparative analysis of cost and profit
efficiencies in Islamic and conventional banks, with a particular focus on the unique market dynamics of Oman.
This research is valuable for stakeholders in the Islamic banking industry, offering insights into leveraging existing
infrastructures and enhancing operational efficiencies. |
| format | Article |
| id | my.uthm.eprints-12341 |
| institution | Universiti Tun Hussein Onn Malaysia |
| language | en |
| publishDate | 2024 |
| publisher | RGSA |
| record_format | eprints |
| spelling | my.uthm.eprints-123412025-04-24T01:07:26Z http://eprints.uthm.edu.my/12341/ A Study On The Cost And Profit Efficiency Of Islamic And Conventional Bank Islamic Windows In Oman: A Proposed Framework Al Asmi, Ali Musallam Sulaiman Abdullah, Mohd Fahmy Sieng, Lai Wei HG Finance Objective: This study aims to analyze the efficiency of Islamic and conventional banks and their respective Islamic windows in Oman in terms of costs and profits. Theoretical Framework: The research employs a framework that examines cost and profit efficiency within the banking sector, contrasting the performance of full-fledged Islamic banks and Islamic windows of conventional banks. This framework also investigates the impact of bank-specific variables on efficiency levels. Method: Using empirical data from the Omani banking sector, the study quantifies efficiency by analyzing bankspecific variables such as capitalization, profitability, operational costs, and loan activity. The comparison includes both Islamic banks and the Islamic windows of conventional banks as of the end of the third quarter of 2022. Results and Discussion: The findings reveal that, overall, banks in Oman are more efficient at generating profits than controlling costs. Conventional banks, on average, demonstrate higher efficiency in both cost and profit metrics compared to Islamic banks. There exists a positive correlation between both types of efficiencies and factors like bank capitalization and profitability, while a negative correlation is evident with operational costs. Furthermore, increased loan activity is associated with higher profit efficiency but adversely affects cost efficiency. Research Implications: These results underscore significant efficiency disparities between Islamic and conventional banking sectors. They highlight the need for Islamic banks to enhance their cost management strategies without compromising profit generation, leveraging the benefits derived from their association with parent conventional banks. Originality/Value: The study contributes to the literature by providing a comparative analysis of cost and profit efficiencies in Islamic and conventional banks, with a particular focus on the unique market dynamics of Oman. This research is valuable for stakeholders in the Islamic banking industry, offering insights into leveraging existing infrastructures and enhancing operational efficiencies. RGSA 2024 Article PeerReviewed text en http://eprints.uthm.edu.my/12341/1/J17756_efc438ff3068c48ede36bea8a6094167.pdf Al Asmi, Ali Musallam Sulaiman and Abdullah, Mohd Fahmy and Sieng, Lai Wei (2024) A Study On The Cost And Profit Efficiency Of Islamic And Conventional Bank Islamic Windows In Oman: A Proposed Framework. Revista de Gestão Social e Ambiental, 18 (2). pp. 1-17. https://doi.org/10.24857/rgsa.v18n2-102 |
| spellingShingle | HG Finance Al Asmi, Ali Musallam Sulaiman Abdullah, Mohd Fahmy Sieng, Lai Wei A Study On The Cost And Profit Efficiency Of Islamic And Conventional Bank Islamic Windows In Oman: A Proposed Framework |
| title | A Study On The Cost And Profit Efficiency Of Islamic And
Conventional Bank Islamic Windows In Oman: A Proposed
Framework |
| title_full | A Study On The Cost And Profit Efficiency Of Islamic And
Conventional Bank Islamic Windows In Oman: A Proposed
Framework |
| title_fullStr | A Study On The Cost And Profit Efficiency Of Islamic And
Conventional Bank Islamic Windows In Oman: A Proposed
Framework |
| title_full_unstemmed | A Study On The Cost And Profit Efficiency Of Islamic And
Conventional Bank Islamic Windows In Oman: A Proposed
Framework |
| title_short | A Study On The Cost And Profit Efficiency Of Islamic And
Conventional Bank Islamic Windows In Oman: A Proposed
Framework |
| title_sort | study on the cost and profit efficiency of islamic and
conventional bank islamic windows in oman: a proposed
framework |
| topic | HG Finance |
| url | http://eprints.uthm.edu.my/12341/1/J17756_efc438ff3068c48ede36bea8a6094167.pdf http://eprints.uthm.edu.my/12341/ https://doi.org/10.24857/rgsa.v18n2-102 |
| url_provider | http://eprints.uthm.edu.my/ |