Document Type |
: |
Article In Journal |
Document Title |
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Panel Data Analysis of Fee Income Activities Islamic Banks تحليل البيانات الإحصائية لأنشطة البنوك الإسلامية المدرة للعمولات |
Subject |
: |
Discussion Paper |
Document Language |
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English |
Abstract |
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In recent years, commercial banking worldwide has experienced a
significant decline in its traditional business of accepting deposits and offering
loans. Simultaneously, banks have become more involved in nontraditional
activities that provide financial services and generate fee income. As a result,
income from nontraditional activities has risen relative to income from
traditional activities. This article presents an empirical investigation of Islamic
banks’ involvement in various fee income activities. Our theoretical hypotheses
relate the level of fee income activities at an individual bank to asset size,
profitability, core deposits, capital risk as well as credit risk. These hypotheses
are tested empirically using bank-specific information from a panel of
Malaysian Islamic commercial banks for the years 1994 to 2004. The results
imply that banks with higher levels of fee-generating activities tend to have
higher assets and core deposits as well as exhibit less risk. These findings show
that banks involved in nontraditional activities have more diverse sources of
funds and greater access to financial markets, which reduces risk. Since the
findings suggest that banks with a greater involvement in nontraditional
activities must resort to alternative sources of funds to finance their operations,
nontraditional activities appear to be one method a bank can use to generate
income. Furthermore, institutions engaged in such activities tend, to a larger
extent, to be safer. Therefore, the underutilized fee income plays an important
alternative source of revenue, hence able to reduce the over-dependence of
Islamic banks on debt-financing as the main source of revenue. |
ISSN |
: |
1018-7383 |
Journal Name |
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Islamic Economics Journal |
Volume |
: |
19 |
Issue Number |
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2 |
Publishing Year |
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1427 AH
2006 AD |
Number Of Pages |
: |
12 |
Article Type |
: |
Article |
Added Date |
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Sunday, October 11, 2009 |
|
Researchers
شاهدة بنت شاهيمي | Shahida Shahimi | Researcher | | |
عبدالغفار إسماعيل | Abd.Ghafar B. Ismail | Researcher | | |
سانب أحمد | Sanep B. Ahmad | Researcher | | |
|