Analysis Paper on Islamic Bank(Meezan Bank)
Science Series Data Record
Vol. four, No . 1; Jan 2012
AN EMPIRICAL STUDY OF RELATIVE PERFORMANCE USING
FRONTIER ANALYSIS STRATEGY – A CASE OF ISLAMIC
Khizer Ali (Corresponding author)
Hailey College of Commerce, University or college of the Punjab, Lahore, Pakistan Tel: +923458800015 Email: [email protected] com
Muhammad Farhan Akhtar
Hailey College or university of Business, University of the Punjab, Lahore, Pakistan Tel: +923464666786Email: [email protected] com
Hailey College of Commerce, College or university of the Punjab, Lahore, Pakistan Email: [email protected] com
The study aims to investigate the relative performance of Islamic banks of Pakistan intended for the period 20072010. Data envelopment analysis is used with an input minimization approach to measure the efficiency of Islamic banks. The benefits reported that for the period under analyze, only one Islamic bank reveals the consistency in its performance level with efficiency score 1, i. e. Meezan Bank Limited the most well-known Islamic traditional bank in Pakistan. Although Islamic banking in Pakistan continues to be in its preliminary stages, which can be observed from your continuous deficits from previous years, Islamic banks are found to be comparatively efficient with the passage of time. So far as total assets are concerned, the regression results reviews insignificant relation with technical efficiency. It implies that the technical efficiency does not depend entirely upon total assets of the banks. Keywords: Islamic banking companies; Efficiency; Data Envelopment Examination; Pakistan 1 ) 0 INTRODUCTION
Islamic bank represents a radical departure from conventional banking, and from the standpoint of corporate governance; it embodies numerous interesting features since collateral participation, risk and profit-and-loss sharing plans form the basis of Islamic auto financing. Using econometric techniques, this paper gives valuable ideas as to the stableness of Islamic banks as well as the factors accountable for the growth of smaller such institutions that has been witnessed within the last decade.
Around the world over 150 Islamic banks are working, which includes commercial to investment financial institutions and Islamic leasing to insurance companies. The Islamic financial system engages the concept of participation, taking advantage of the money on a profit-and-loss-sharing basis inside Shariah guidelines(Masood, Niazi, & Ahmad, 2011). The Islamic financial system employs the concept of involvement in the venture, utilizing the
EMAIL: [email protected] COM
Technology Series Info Report
Volume. 4, No . 1; January 2012
money at risk over a profit-and-loss-sharing basis. In Pakistan efforts for the promotion of Islamic banking first start in 1970s after which realistic methods were consumed in early 2001s. Since you will find relatively handful of studies carried out in this area, specifically among Islamic banks in Pakistan, this kind of study will certainly broaden the scope with the literature by providing innovative scientific evidence. installment payments on your 0 BOOKS REVIEW
Rosly and Bakar (2003) set up that Islamic banking system (IBS) possess evidenced outstanding return upon assets (ROA). Pasiouras and Kosmidou (2007) explored the bank explicit features and the factors affecting earnings of banking institutions in the total banking environment. The study researched the foreign and domestic banking institutions operating in 12-15 European Union countries for the period 1995-2001. The research established which the profitability of both home and foreign banks not simply affects by banks specific characteristics nevertheless also there is a significant role of macroeconomic conditions as well as the structure of economic markets. In addition the study found explanatory benefits of domestic possessed banks is more than the explanatory power of overseas owned banking institutions (in conditions of R2). Dusuki and Abdullah (2007); Ghayad (2008) examined the factors that motivated clients to deal with Islamic banks. Using self-administered forms from Malaysia the...
References: AlKhathlan, E., & Malik, S. A. (2010). Happen to be Saudi Banking institutions Efficient? Data Using Info Envelopment Research
(DEA). Intercontinental Journal of Economics and Finance, 2(2), 53-58.
Awan, H. Meters., & Bukhari, K. H. (2011). Consumer 's conditions for selecting a great Islamic financial institution: evidence via Pakistan.
Casu, B., Molyneux, P. (2003), " A comparative research of effectiveness in European banking", Applied Economics,
Coelli, T., PrasadaRao, D. H., Battese, G. E. (1998), An Introduction to Efficiency and Productivity Examination,
Kluwer Educational, Boston, MOTHER,
Dusuki, A. W., & Abdullah, And. I. (2007). Why do Malaysian buyers patronise Islamic banks? Foreign
Journal of Bank Advertising, 25 (3), 142-160.
Ghayad, R. (2008). Corporate governance and the global performance of Islamic banking companies. Humanomics, twenty four (3),
Hamid, A., & Masood, O. (2011). Selection criteria for Islamic home auto financing: a case examine of Pakistan.
Hassan, Capital t., Mohamad, S i9000., & Reluquer, M. K. (2009). Performance of conventional versus Islamic banks: proof
from the Midsection East
Masood, O. (2011). An research of the expansion and go up of small Islamic banks in last decad. Qualitative
Research economic Markets, 3 (2), 105-116.
Masood, To., Niazi, G. S., & Ahmad, And. (2011). A great analysis in the growth and rise of smaller Islamic banks in
last 10 years. Qualitative Research in Financial Market segments, 3(2), 105-116.
Mokhtar, They would. S., Abdullah, N., & Alhabshi, T. M. (2008). Efficiency and competition of Islamic bank in
Malaysia. Humanomics, 24(1), 28-48.
Mostafa, M. Meters. (20011). Modeling Islamic financial institutions ' efficiency: a non-parametric frontier procedure. International
Log of Islamic and Middle section Eastern Financing and Supervision, 4 (1), 7-29.
Pasiouras, F., & Kosmidou, T. (2007). Factors influencing earnings of home and foreign commercial
banking companies in the European Union. Research in International Business and Finance (21), 222–237.
Portela, Meters., Thanassoulis, At the., Simpson, G. (2004), " Negative data in DEA: a directional distance strategy
applied to traditional bank branches", Log of the Functional Research Culture, (55), 1111-21.
Rosly, S i9000. A., & Bakar, M. A. (2003). Performance of Islamic and mainstream banking institutions in Malaysia. International
Record of Social Economics, 35 (12), 1249 - 1265.
Sarkis, M., Weinrach, J. (2001), " Using info envelopment analysis to evaluate environment friendly waste
treatment technology", Log of Solution Production, (9), 417-27.
Thanassoulis, E. (2001), Introduction to the Theory and Application of Data Envelopment Analysis: A
Foundation Text message with Integrated Software, Kluwer Academic Publishers, Boston, MA,