FINANCIAL DIFFERENCES AND SIMILARITIES OF ISLAMIC BANKS: A STUDY ON QISMUT COUNTRIES

Abstract

Six countries, namely Qatar, Indonesia, Saudi Arabia, Malaysia, UAE and Turkey (abbreviated as QISMUT) are considered to play an important role in the future international development of the Islamic finance. QISMUT countries have a majority Muslim population who prefers Islamic finance for their banking needs. QISMUT countries account for 38 million customers which is 67% of the global Islamic bank customer base. The focus of this study is to define similar (or different) international banks using the financial data collected from Islamic banks operating in QISMUT countries between 2012 and 2014. In this context, 56 Islamic banks were categorized in the light of their financial ratios for the period between 2012 and 2014 using cluster analysis. There was also an attempt to identify these clusters using multidimensional scaling analysis. Positions of QISMUT Islamic banks in the multidimensional space were defined using multidimensional scaling analysis. Results showed that Islamic banks operating in QISMUT countries are similar in terms of their financial structure.

References

1. • Aldohni, A. K. (2015) the Quest for a Better Legal and Regulatory Framework for Islamic Banking, Ecclesiastical Law Journal / Volume 17 / Issue 01 / pp 15 – 35.
2. • Amel Belanès, A., Ftiti, Z. and Regaïeg, R. (2015) What can we learn about Islamic banks efficiency under the subprime crisis? Evidence from GCC Region, Pacific- Basin Finance Journal 33 (2015) 81–92
3. • Ariff, M. (2014) Whither Islamic Banking? The World Economy, Volume 37, Issue 6, pages 733–746.
4. • Bellalah, M. and Ellouz S. (2004). Islamic finance, interest rates and Islamic banking: A Survey of the literature. Finance India: special issue, 18, 533-546.
5. • Burn, D.H. and Goel, N.K. (2000) The Formation of Groups for Regional Flood Frequency Analysis. Hydrological Sciences Journal, 45(1), 97–112