Skip Navigation Links.
Collapse <span class="m110 colortj mt20 fontw700">Volume 12 (2024)</span>Volume 12 (2024)
Collapse <span class="m110 colortj mt20 fontw700">Volume 11 (2023)</span>Volume 11 (2023)
Collapse <span class="m110 colortj mt20 fontw700">Volume 10 (2022)</span>Volume 10 (2022)
Collapse <span class="m110 colortj mt20 fontw700">Volume 9 (2021)</span>Volume 9 (2021)
Collapse <span class="m110 colortj mt20 fontw700">Volume 8 (2020)</span>Volume 8 (2020)
Collapse <span class="m110 colortj mt20 fontw700">Volume 7 (2019)</span>Volume 7 (2019)
Collapse <span class="m110 colortj mt20 fontw700">Volume 6 (2018)</span>Volume 6 (2018)
Collapse <span class="m110 colortj mt20 fontw700">Volume 5 (2017)</span>Volume 5 (2017)
Collapse <span class="m110 colortj mt20 fontw700">Volume 4 (2016)</span>Volume 4 (2016)
Collapse <span class="m110 colortj mt20 fontw700">Volume 3 (2015)</span>Volume 3 (2015)
Collapse <span class="m110 colortj mt20 fontw700">Volume 2 (2014)</span>Volume 2 (2014)
Collapse <span class="m110 colortj mt20 fontw700">Volume 1 (2013)</span>Volume 1 (2013)
Journal of Business and Management Sciences. 2016, 4(4), 98-104
DOI: 10.12691/JBMS-4-4-4
Original Research

Efficiency of Islamic Financial Institutions

Sirine Gha1, and Nejia Nekâa1

1Financial Methods and Accountants, The Faculty of Economic and Management Sciences Sfax

Pub. Date: October 18, 2016

Cite this paper

Sirine Gha and Nejia Nekâa. Efficiency of Islamic Financial Institutions. Journal of Business and Management Sciences. 2016; 4(4):98-104. doi: 10.12691/JBMS-4-4-4

Abstract

The Islamic finance constitutes an ethical finance saw that it encourages on investment in sectors socially responsible. It prohibits the investment in the areas of illicit and supports the distribution of profits and losses. In this study, we have studied the efficiency of 21 Islamic banks on a global scale in a period of 5 years from 2010 to 2014. We use in this context the following ratios ESOP, ROAE, Ooi, CTI, denies to apprehend the overall profitability and the method of the wrapping of the data (DEA) to calculate the scores of efficiency.

Keywords

efficiency, Islamic banks, analysis by ratios, DEA

Copyright

Creative CommonsThis work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References

[1]  Abdul-Majid. M, Saal. D.s. and Battisti. G (2003), “Efficiency in Islamic and conventional banking: an international comparison”, Journal of Productivity Analysis34 (1) , pp 25-43.
 
[2]  Abdus Samad & Mr. Kabir Hassan (2000), “the performance of Malaysian Islamic bank during 1984-1997: An Exploratory Study”, International Journal of Islamic Financial Services Vol. 1 No.3.
 
[3]  Aigner D.J., Lovell C.A.K. and Schmidt P., (1977), “Formulation and estimation of stochastic frontier production models”, Journal of Econometrics, 6, pp.21-37.
 
[4]  Al-Khasawneh, J. A., Bassedat, K., Aktan, Darshini Pun Thapa, P. (2012), “Efficiency of Islamic Banks: check box of North African Arab countries”, Qualitative Research in Financial Markets, 4(2/3) , pp 228-239.
 
[5]  Bader, Mr. K. I., Mohamad, S., Ariff, M., & Hassan, T. (2008), “Cost, Revenue, and profit efficiency of Islamic versus conventional banks: International Evidence Using Data Envelopment Analysis”, Islamic Economic Studies, 15(2), pp 23-76.
 
[6]  Banker, R. D., Charnes, A. & Cooper, W. W. (1984). “Some models for estimating technical and scale inefficiencies in data envelopment analysis”, Management Science, 30(9), pp 1078-1092.
 
[7]  Beck, T., Demirgüç-Kunt, A. & Merrouche, O. (2013), “Islamic vs. conventional banking: business model, effi ciency and stability,” Journal of Banking & Finance, 37, pp 433-447.
 
[8]  Brown, B. K. (2003),” Islamic Banking Comparative Analysis”, the Arab Bank Review , 5 (2), pp 43-50.
 
[9]  Charnes, has, Cooper, W. W. & Rhodes E. L. (1978). “Measuring the efficiency of decision making units”, European Journal of Operational Research, 2(6), pp 429-444.
 
[10]  Debreu, Gerard (1951), “The coefficient of resource utilization,” Econometrica, 19, pages 273-292.
 
[11]  Emrouznejad, A., Parker, B. R. and Tavares G. (2008). “Evaluation of Research in efficiency and productivity: a survey and analysis of the first 30 years of scholarly literature in DEA”, Socio-Economic Planning Sciences, 42(3), pp 151-157.
 
[12]  Evanoff, D.D. & Fortier, D.L. (1988), “Re-evaluation of the structure conduct performance paradigm in Banking”, Journal of Financial Services Research 1 (3).
 
[13]  Farrell, M. (1957), “The measurement of productive efficiency”, Journal of the Royal Statistical Society, 120(3), pp 253-281.
 
[14]  Hasan, Z. (2007), “Measuring Efficiency of Islamic Banks: criteria, methods, and social priorities”, MPRA, (2977).
 
[15]  Hassan, Mr. K. & Bashir, A. M. (2005), “Determinants of Islamic banking profitability, in Munawar Iqbal and Rodney Wilson (editors): Islamic perspectives on Wealth Creation”, Edinburgh University Press, UK. Pp 118-141.
 
[16]  Iqbal, Z. (1997), “Islamic financial systems”, Finance & Development, June.
 
[17]  Johnes, J., Izzeldin, M., & Pappas, V. (2009), “The efficiency of Islamic and conventional banks in the Gulf Cooperation Council (GCC) countries: an analysis using financial ratios and Data Envelopment Analysis”, Working Paper.
 
[18]  Koopman T. (1951), “Analysis of production as an efficient combination of activities”, activity. In T.C. Koopmans, ed, activity analysis of production and Allowance . Monograph No. 13. John Wiley and Sons, Inc., New York.
 
[19]  Meeusen W., J. Van den Broeck, (1977), “Efficiency estimation from Cobb- Douglas production functions with composed Errors,” International Economic Review, 18, pp 435-444.
 
[20]  Mohamad Abdul Hamid. M and Azmi. S.M (2011), “the performance of banking during 2000-2009: bank Islam Malaysia Berhad and conventional banking in Malaysia”, International Journal of Economics and Management Sciences Vol. 1, No. 1, pp. 09-19.
 
[21]  Niazi, G. S. K. (2003), “Measuring cost efficiency and productivity change of commercial banks in Pakistan 1991-2000”, Phd thesis, Quaid-e Azam University, Islamabad, Pakistan. [online] Available: Http://prr.hec.gov.pk/thesis/2264.pdf.
 
[22]  Nor Hayati, A., Mohamad Akbar, N., & Fadzlan, S. (2011), “Measuring Islamic banks efficiency: the case of world Islamic banking sectors”, MPRA, (29497).
 
[23]  Olson, D., & Zoubi, T. a. (2008), “Using accounting ratios to distinguish between Islamic and conventional banks in the GCC region”, the International Journal of Accounting , 43 (1), pp 45-65.
 
[24]  Qureshi, Mr. A., & Shaikh, M. (2012), “Efficiency of Islamic and conventional banks in Pakistan: a non-parametric approach”, International Journal of Business and Management, 7 (7), pp 40-50.
 
[25]  Regaieg. B and Abidi. E (2015), “Islamic Banks sides to the subprime crisis: study of the x-efficiency by the SFA method,” International Journal of Innovation and Applied Studies ISSN 2028-9324 Vol. 10 No. 1, pp. 45-59.
 
[26]  Samad, A. (2004), “Performance of Interest-Free Islamic banks vis-a-vis interest-based conventional banks of Bahrain”, IIUM Journal of Economics and Management, 12 (2).
 
[27]  Souleymane Soulama (2008), “technical effectiveness and inefficiency at the scale of microfinance institutions in Burkina Faso, Laboratory of Economics of Orleans, UMR CNRS 6221, pp 1-24.
 
[28]  Srairi, S. A. & Kouki, I. (2012), “Efficiency and stock market performance of Islamic Banks in GCC Countries”, Isra International Journal of Islamic Finance, 4(2) , pp 89-116.
 
[29]  Sufian, F. & Noor, M.A.N.M. (2009), “The Determinants of Islamic bank's efficiency changes: Empirical Evidence from the MENA and Asian countries Islamic banking sectors, International Journal of Islamic and Middle Eastern Finance and Management, 2(2), pp 120-138.
 
[30]  Yudistira, D. (2004), “Efficiency in Islamic banking: an Empirical Analysis of eighteen Banks”, Islamic Economic Studies , 12 (1), pp 1-19.