From conventional to Islamic banks: Factors affecting customer interests and decision making in selecting banks
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Author(s)H. M. MuhdarLink to ORCID Index: https://orcid.org/0000-0002-7248-1865
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DarmonoLink to ORCID Index: https://orcid.org/0000-0001-6039-4548
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Andi MardianaLink to ORCID Index: https://orcid.org/0000-0001-5928-6128
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Rahmawati MuinLink to ORCID Index: https://orcid.org/0000-0002-9600-5038
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Rizal DarwisLink to ORCID Index: https://orcid.org/0000-0002-9094-4368
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DOIhttp://dx.doi.org/10.21511/bbs.18(3).2023.06
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Article InfoVolume 18 2023, Issue #3, pp. 61-73
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Creative Commons Attribution 4.0 International License
The phenomenon of increasing customers of take-over financing from conventional banks to Islamic banks is an interesting trend to study. This research purpose is to investigate the influence of murabahah financing margins, customer religiosity to customer interest and decision making. The method used is a sequential mixed method. The instrument quantitative is a questionnaire, and the qualitative method is an interview. 199 pensioner customers participated in the survey. Internal consistency is measured by Cronbach’s alpha value. The accuracy of the structural equation modeling (SEM) and hypothesis testing was evaluated using AMOS version 23. The research findings indicate, there was a significant influence between customer religiosity on customer interest and customer interest on decision making. Meanwhile, the murabahah financing margin has no significant influence on customer interest and decision making, as well as between customer religiosity and decision making. Murabahah financing margins and customer religiosity have an influence of significance when mediated by the variable of customer interest. In conclusion, Murabahah financing margin, and customer religiosity does not have a direct significant influence on decision making without being mediated by the variable of customer interest. These results indicate that Islamic bank managers can take advantage of this research variable to increase customer interest so that customer decision making also increases. This study has practical implications for conventional banks and sharia banks. Sharia banks are an opportunity to attract customers from conventional banks, while conventional banks are a challenge because their customers have the potential to take over Islamic banks.
Acknowledgments
The authors are grateful to the Rector of the State Islamic Institute of Sultan Amai Gorontalo, and the State Islamic University of Alauddin Makassar for funding this research collaboratively, and to the respondents who have taken the time to fill out the research questionnaire so that research data can be collected.
- Keywords
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JEL Classification (Paper profile tab)G21, D12, D40, D70
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References49
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Tables3
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Figures1
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- Figure 1. Correlation model between variables
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- Table 1. Evaluation of overall goodness of fit indices criteria
- Table 2. Research hypotheses testing
- Table 3. Estimation results of the indirect effect between variables based on the model
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Determinants of liquidity risk in Islamic banks
Tariq Alzoubi
doi: http://dx.doi.org/10.21511/bbs.12(3).2017.10
Banks and Bank Systems Volume 12, 2017 Issue #3 pp. 142-148 Views: 1435 Downloads: 1059 TO CITE АНОТАЦІЯThis research analyzes the determinants of liquidity risk in Islamic banks by using a comprehensive model that incorporates several variables that impact the liquidity of Islamic banks. A panel data analysis is conducted on a sample of 42 Islamic banks from 15 countries between 2007 and 2014. The results show a negative correlation between liquidity risk and cash ratio, as the cash balance can be used to meet any demands for liquidity from the bank’s customers. There is negative correlation between liquidity risk and securities held by the bank, since banks which need liquidity can sell these assets to meet any liquidity shortages they face. Bank size also has a negative relationship with liquidity risk, as larger banks tend to have more stability and customers feel safer dealing with large banks. Bank’s equity also has a negative correlation with liquidity risk, as equity is a more stable source of funding for banks, a higher ratio of equity lowers liquidity risk. On the other hand, there is a positive relationship with high profit assets, as banks shift their portfolio towards more profitable assets in order to increase their earnings, they face greater liquidity risk, a positive relationship also exists with bad finance provision. Additionally, the findings demonstrate that the relationship between bank size and liquidity risk is not linear.
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Financial performance of conventional and Islamic banks in Bahrain: a comparative study
Banks and Bank Systems Volume 14, 2019 Issue #4 pp. 192-205 Views: 1342 Downloads: 293 TO CITE АНОТАЦІЯThe main purpose of this study is to identify the variables that influence the financial performance of both types of banks, Islamic and conventional, and compare their financial performance over the period of 2003–2016. Banks listed on the Bahrain Bourse as of December 31, 2016 were used in the study, with a total of seven banks, of which three are Islamic and four are conventional. To make an appropriate comparative study, financial ratio analysis is used. Multiple regression and paired sample t-test are used to analyze the data. Return on assets (ROA) and return on equity (ROE) are considered as the basis for measuring financial performance and are set as dependent variables. The analysis of the results shows that conventional banks perform better than Islamic banks in terms of profitability. The results also show that ROA is significantly related to risk, cost of intermediation and efficiency ratios, while ROE is highly influenced by risk ratios only. Moreover, it was found out that the relationship between asset size and the performance of banks is insignificant, while the relationship between the number of branches and both ROA and ROE is significant.
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Performance differences between Islamic and conventional banking forms
Turki Alshammari
doi: http://dx.doi.org/10.21511/bbs.12(3-1).2017.08
Banks and Bank Systems Volume 12, 2017 Issue #3 pp. 237-246 Views: 1111 Downloads: 614 TO CITE АНОТАЦІЯThis paper strives to recognize the possible performance differences between the two popular banking forms in the Gulf Cooperation Council (GCC) countries. Applying different methodologies on the data that span the period 2003–2015, this study docu¬ments significant differences with respect to the period, countries, and performance measures. Specifically, conventional banks in GCC countries outperform their Islamic counterparts in profitability. Also, bank specific factors such as liquidity, capital ad¬equacy, bank size and growth all affect the profitability. In addition, GCC conventional and Islamic banks were isolated from the 2008 subprime crisis even though their prof¬itability seems to be decayed differently over the period of the economic downturn.
