The Future for Financial Stability of Islamic Banks in GCC - Essay Example

Add to wishlist

Summary

The hypothetic-deductive logical approach makes use of hypothesis testing as well as an inferential statistic to make credible statistical conclusions. The paper "The Future for Financial Stability of Islamic Banks in the GCC" will make use of regression analysis to achieve its primary goals. …

Download full paper File format: .doc, available for editing

GRAB THE BEST PAPER97% of users find it useful

The Future for Financial Stability of Islamic Banks in GCC

Read Text

Subject: Finance & Accounting
Type: Essay
Level: Undergraduate
Pages: 1 (250 words)
Downloads: 2
Author: jleffler

Extract of sample "The Future for Financial Stability of Islamic Banks in GCC"

Due to their ease of calculation from financial results, financial ratios will be used in the regression analysis.

In the regression analysis of profitability, there will be three dependent variables; return on equity, net profit as well as return on assets. Each of the three variables will be regressed against independent variables, one at a time. It is important to note that return on assets does not only provide information regarding how incomes are generated by every single asset, but it also depicts the ability of financial institutions to acquire deposits and invest them for considerable profits. On the other hand, return on equity denotes a measure of returns by shareholders to the firm.

The equation that will be used to do the regression analysis is as below:

Profitability= B0+B1*Leverage+ B2*Size-+ B3*Investment+ B4*GDP + B5*IB dummy + c

In this case;

Leverage= Assets/Total capital

Investment= Investment Portfolio/ Total Assets

Size= Book value of total assets

GDP= Change in GDP growth rate

IB dummy= 1 if an Islamic bank and 0 if the conventional bank

B0…B6 = Coefficients of independent variables

Efficiency Ratio= Operating expenses / Operating income

In addition, factors that can possibly explain the relative differences across conventional banks and Islamic banks in their credit growth will also be examined through regression analysis.

Credit growth= B0+ B1* Leverage + B2*Size + B3*Investment+ B4*GDP + B%*IB dummy+ c

Cite this document

APA
MLA
CHICAGO

(“The future for financial stability of islamic banks in GCC Essay”, n.d.)
The future for financial stability of islamic banks in GCC Essay. Retrieved from https://studentshare.org/finance-accounting/1685791-the-future-for-financial-stability-of-islamic-banks-in-gcc

(The Future for Financial Stability of Islamic Banks in GCC Essay)
The Future for Financial Stability of Islamic Banks in GCC Essay. https://studentshare.org/finance-accounting/1685791-the-future-for-financial-stability-of-islamic-banks-in-gcc.

“The Future for Financial Stability of Islamic Banks in GCC Essay”, n.d. https://studentshare.org/finance-accounting/1685791-the-future-for-financial-stability-of-islamic-banks-in-gcc.

Cited: 0 times

CHECK THESE SAMPLES OF The Future for Financial Stability of Islamic Banks in GCC

The Effects of Financial Crisis on Islamic Banking

Islamic Banks from GCC continuously showed a growth in assets and credit that surpassed the non-islamic banks in all countries, apart from UAE (Čihák & Hesse, 2008).... Additionally, some Islamic banks experienced a weakness in risk-management practices, which led to a larger profitability reduction than non-islamic banks in 2009.... he nature of islamic banks business model played a key role in containing the unfavourable effect on their profitability during the 2008 financial crisis....

6 Pages (1500 words) Essay

Central Bank: Global Perspective

The gcc banking sector has largely reformed its structure and financial sector in recent times owing to the newly formulated regulations that govern its operations.... The structure of gcc is currently dominated by other small domestic and foreign banks that function to meet the banking service needs of the populace.... n the recent past, the assets of the gcc banking sector have experienced remarkable growth at a very fast rate that was later curtailed by the emergence of the global financial crisis....

7 Pages (1750 words) Assignment

The Differences between Islamic and Conventional Banks

Despite these existing trends, little academic evidence and research on the functioning of islamic banks are recorded.... Numerous academic research and literature have gone further to establish the viability of these types of banks in dealing with finances.... "The Differences between Islamic and Conventional Banks" paper examines by comparing the performance of islamic and conventional banks based in Qatar.... To get a better and wide understanding of the trends and differences presented by Islam banks and commercial banks, it would be worthy of note to include banks from other localities....

12 Pages (3000 words) Research Paper

Islamic banks and Conventional Banks

These findings hint at the higher growth prospects and expected consistency and stability in the operations of the islamic banks in the future.... The report 'islamic banks and Conventional Banks' is aimed at identifying and assessing the performances of the Islamic banking system on the metrics of financial performance, productivity, liquidity, efficiency, profitability and growth as well as on other ancillary factors.... The analysis clearly indicates that the islamic banks are growing consistently and are displaying impressive financial and managerial performances over the last 30 years of their functioning in the global financial markets....

11 Pages (2750 words) Term Paper

Institutional Infrastructure for Islamic Bank Mergers and Acquisitions in the GCC countries

The figures bear him out: the top five conventional banks in the Gulf states (excluding Oman) account for a combined market share of 22%, while the top five Islamic banks account for only 9% (Asiamoney, 2007).... The aim of this dissertation is to study the status of mergers and acquisitions among islamic banks, or between Islamic and conventional banks, within the Gulf Cooperation Council region.... Until the present, there has been little incentive to merge with or acquire other banks, because most islamic banks are currently building scale by growing organically....

12 Pages (3000 words) Research Proposal

Conventional and Islamic Banks

The author states that eight variables have been identified to be involved in assessing the financial stability of a bank.... The present paper 'Conventional and islamic banks' is a comparative analysis of the financial stature of conventional and islamic banks operating in the GCC nations of the world.... • Net Interest Margin (NIM) – Net Interest Margin is the difference between the interest earned by the banks out of credits advanced to the investors and the payments they are supposed to make to their creditors or the depositors....

24 Pages (6000 words) Research Paper

Financial Stability of Islamic Banks

The paper "financial stability of islamic banks" is a wonderful example of a research proposal on finance and accounting.... The paper "financial stability of islamic banks" is a wonderful example of a research proposal on finance and accounting.... Apart from the stability aspect that is influenced by the economic crisis, the paper also examines a brief literature review on the factors that lead to instability of both conventional banks and islamic banks in general....

13 Pages (3250 words) Research Proposal

The Manner through Which Banking Activity Is Controlled in the Islamic Law

This was the period that led towards the growth and development of islamic banks and made the banks function as the traditional banks.... This led to the creation of islamic banks which believed in interest-free banking as an idea, the emergence and establishment of islamic banks, and the spread of islamic banks.... This phase witnessed a boom in the number of islamic banks around the world.... Islamic banks and conventional banks have similarities as I myself refer to the place where the money is exchanged and is in use for ages like the conventional banks in modern times....

10 Pages (2500 words) Thesis Proposal