The relationship between Islamic banks' profitability and country income levels
by Mohamad Akbar Noor Mohamad Noor; Nor Hayati bt. Ahmad
International Journal of Business Competition and Growth (IJBCG), Vol. 2, No. 2, 2012

Abstract: This paper investigates the efficiency of 78 Islamic banks in 25 countries for the period 1992-2009. The Fixed Effect Model (FEM) that was used to analyse profitability proposed that profit efficiency is positive and statistically significant with operating expenses against asset, high income countries and non-performing loans against loans. Interestingly, the empirical results show that the more profitable banks are those that have higher operating expenses against assets, more equity against assets and concentration in high income countries. The finding is high income countries that engage more with banking products that can lead towards profitability of Islamic banks.

Online publication date: Sat, 15-Nov-2014

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