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Financial Hindrances to Growth: Understanding Profitability Issues in Pakistan’s Islamic Banking Sector

Author

Listed:
  • Ali, Zuha
  • Khan, Saleh Nawaz
  • Masood, Omar
  • Alim, Wajid

Abstract

Purpose: The study aims to examine the banks internal factors influencing the profitability of Islamic banks in Pakistan, focusing on dimensions such as quick ratio, cash deposit ratio, capital adequacy, and bank size.Design/Methodology/Approach: A Secondary data collection method has been used in this quantitative nature of study. Using quantitative analysis with Stata software, this study analyzes data from 2015 to 2023 sourced from Islamic banks' official websites.&Findings: Analysis of the study reveals that capital adequacy, bank size, and quick ratio are the factors that significantly affect Islamic bank profitability, while the cash deposit ratio shows a no significant impact.Implications/Originality/Value: By identifying critical profitability drivers, this research offers actionable insights for policy formulation and regulatory reforms, strategic planning for banks, operational efficiency, financial inclusivity, and investment attraction. &

Suggested Citation

  • Ali, Zuha & Khan, Saleh Nawaz & Masood, Omar & Alim, Wajid, 2024. "Financial Hindrances to Growth: Understanding Profitability Issues in Pakistan’s Islamic Banking Sector," Journal of Accounting and Finance in Emerging Economies, CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan, vol. 10(2), pages 321-330, June.
    • Handle: RePEc:src:jafeec:v:10:y:2024:i:2:p:321-330
    DOI: http://doi.org/10.26710/jafee.v10i2.3078
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