FINANCIAL PERFORMANCE OF THE ISLAMIC BANKING: AN INTERNATIONAL COMPARISON USING TOPSIS METHOD

Year 2023, Volume: 10 Issue: 4, 628 - 642, 18.10.2023

Hilal H. Erdogan

Abstract

The aim of this study is to evaluate financial performance of the Islamic banks based on international comparison between 2014 and 2022. The regions and countries which have dependencies with a presence in Islamic finance were included. TOPSIS Method as a multicrieria decision making method was used to rank the regions and countries. Four regions (Southeast Asia, GCC, South Asia, Other MENA) and nine countries (Indonesia, Brunie Darussalam, Kuwait, UAE, Oman, Pakistan, Bangladesh, Jordan, Sudan) were selected based on Islamic Finance Development Report 2022. ROA, ROE, NPM, Gross NPF, net NPF, capital to assets, liquid assets ratio, liquid assets to short-term liabilities and CAR were taken as financial evaluation criteria. The results indicate that while Other MENA is determined as the best performing region for Islamic banking, the country with the best performance is Sudan for the analysis period.

Keywords

Performance measurement, Islamic banking, TOPSIS Method.

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