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The Determinants of the Pakistan Islamic Banking Industry Profitability

Islamic Banking and Finance Review

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Field Value
 
Title The Determinants of the Pakistan Islamic Banking Industry Profitability
 
Creator Farrukh Ijaz
Anum Akmal
Syeda Hameeda Batool Gillani
 
Subject Islamic Banks
Profitability
ROA
ROE
Bank Size
CAR
 
Description he financial sector plays an important role in the economic and fiscal development of a country. A well-built and vigorous banking system is a precondition for the sustainable financial growth of a country. Over the past few years, Islamic banking industry of Pakistan has been facing many problems and challenges to maintain the financial stability. To overcome this issue, it is vital to classify the factors that mostly impact the overall profitability of Islamic banks in Pakistan. Two models were used alternatively for ROA and ROE as dependent variable. A set of internal factors were considered as independent variables including: bank‘s size, gearing ratio, operational efficiency, asset management and capital adequacy ratio for the time period 2006-2013. The results indicate that different measures of profitability depend upon different bank specific factors. The study found that profitability of Islamic banks depends on the leverage ratio, operating efficiency, asset management and bank size. Further research can be extended to explore the above findings and to include some other internal factors such as general bank charges, doubtful loans or reserves ratios, and external factor such as GDP, exchange rate and CPI as well.
 
Publisher Department of Banking and Finance, University of Management & Technology, Lahore, Pakistan
 
Date 2015-03-03
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://journals.umt.edu.pk/index.php/IBFR/article/view/170
10.32350/ibfr.2015.02.06
 
Source Islamic Banking and Finance Review; Vol 2 (2015): IBFR 1436H/2015; 77-91
2221-5239
2413-2977
 
Language eng
 
Relation https://journals.umt.edu.pk/index.php/IBFR/article/view/170/163
 
Rights Copyright (c) 2015 Islamic Banking and Finance Review (IBFR)