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Determinants driving bank performance: a comparison of two types of banks in the OIC

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dc.contributor.authorPoi Hun Sun
dc.contributor.authorMohamed Ariff
dc.contributor.authorShamsher Mohamad Ramadili Mohd
dc.date.accessioned2017-06-02T01:11:41Z
dc.date.available2017-06-02T01:11:41Z
dc.date.issued2017
dc.description.abstractThis paper extracts key variables from documented findings on bank intermediation margins of two types of banks in the Organisation of Islamic Countries. The intermediation margins used as the dependent variable are: net interest margins of conventional banks and the net profit margins of Islamic banks. To overcome the endogeneity issue of variables, an appropriate econometric procedure namely the dynamic Generalized Method of Moments is applied using data from 105 commercial banks over 14 years. The results are interesting: there is a significant difference in the margins across the two types of banks, 2.17% and 1.61% respectively. Capital adequacy, management quality, and diversification determinants significantly explain the margins of both types of banks. We also find evidence suggesting market quality matters. This is an expected result since both banks operate, despite their inherent institutional differences, in a competitive environment to meet the core demands for funds, which are the same, for traditional lending and borrowing activities. However, this also shows that both CBs and IBs in dual banking system are not significantly different from each other, despite the perception arising from minor institutional differences. These findings provide insights on the unique banking performance in dual banking systems.en_US
dc.identifier.citationSun, P. H., Ramadili Mohd, S. M., & Ariff, M. (2017). Determinants driving bank performance: a comparison of two types of banks in the OIC. Pacific-Basin Finance Journal, 42, pp. 193-203.en_US
dc.identifier.doihttps://doi.org/10.1016/j.pacfin.2016.02.007
dc.identifier.issn0927-538X
dc.identifier.urihttps://ikr.inceif.edu.my/handle/INCEIF/2544
dc.languageEnglish
dc.language.isoengen_US
dc.publisherElsevieren_US
dc.rights2016. Elsevier
dc.sourceSEDONA
dc.subjectNet interest marginsen_US
dc.subjectNet profit marginsen_US
dc.subjectDeterminantsen_US
dc.subjectIntermediation marginen_US
dc.subjectIslamic banksen_US
dc.subjectDual banking systemen_US
dc.titleDeterminants driving bank performance: a comparison of two types of banks in the OICen_US
dc.typeJournal Articleen_US
dlc.maintopicIslamic bankingen_US
dspace.entity.typePublication
ikr.doctypeScholarly Works
ikr.topic.maintopicIslamic bankingen_US
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relation.isAuthorOfPublication33b91dde-0170-454c-8f2b-ec4b208837b9
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relation.isAuthorOfPublication.latestForDiscovery33b91dde-0170-454c-8f2b-ec4b208837b9
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