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Measuring the Financial Performance of Islamic Banks

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  • Mukdad Ibrahim

Abstract

The aim of this paper is to measure the financial performance of two Islamic banks in United Arab Emirates for the period of 2003 to 2007. Different groups of ratios have been used to measure the performance and make a comparison between these two banks. The ratios which are used are going to measure liquidity, profitability, management capacity, capital structure and share performance ratios. The research goes further step to measure the financial stability of the two banks. Descriptive statistical analysis was used to rank the performance, measuring the dispersion and the stability of performance. The finding revealed that the both banks did well for the above period. Moreover, the liquidity level is lower in Dubai Islamic bank than its rival, while the profitability level is much higher in Dubai Islamic bank than in Abu Dhabi bank. Dubai Islamic bank, has managedby and large its operation more successfully than Abu Dhabi Islamic bank, but the later bank is not far off with a similar capital structure. The four ratios of share performance indicted that Abu Dhabi Islamic bank is better off than Dubai Islamic bank. Finally, Abu Dhabi bank had a high level of stability than Dubai Islamic bank.

Suggested Citation

  • Mukdad Ibrahim, 2015. "Measuring the Financial Performance of Islamic Banks," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 5(3), pages 1-7.
    • Handle: RePEc:spt:apfiba:v:5:y:2015:i:3:f:5_3_7
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    Citations

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    Cited by:

    1. Yomna Daoud & Aida Kammoun, 2017. "Financial Performance Analysis of Islamic Banks in Tunisia," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(8), pages 780-789, August.
    2. Amirul Afif Muhamat & Ahmad Farouk Zulkifli & Suzana Sulaiman & Geetha Subramaniam & Saadiah Mohamad, 2021. "Development of Social Cost and Benefit Analysis (SCBA) in the Maqāṣid Shariah Framework: Narratives on the Use of Drones for Takaful Operators," JRFM, MDPI, vol. 14(8), pages 1-17, August.
    3. Soumya Sasidharan & V. K. Ranjith & Sunitha Prabhuram, 2023. "Determinants of Factors Affecting the Financial Performance of Indian General Insurance Firm: Panel Data Evidence," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 17(2), June.
    4. Mukdad Ibrahim, 2015. "A Comparative Study of Financial Performance between Conventional and Islamic Banking in United Arab Emirates," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 868-874.

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