Abstract

http://ssrn.com/abstract=1735651
 


 



Estimating the Profitability of Islamic Banking: Evidence from Bank Muamalat Indonesia


Mehmet Asutay


Durham University - School of Government and International Affairs

Hylmun Izhar


Islamic Research & Training Institute, Islamic Development Bank

2007

Review of Islamic Economics, Vol. 11, No. 2, pp. 17-29, 2007

Abstract:     
The primary goal of this paper is to empirically analyze the performance of Bank Muamalat Indonesia (BMI) in terms of its ROA. Utilizing regression analysis, the paper estimates the internal determinants; taken from the bank financial structure as well as its external determinant. It is found that profit has been dominantly generated from financing activities. On the other hand, service activities have not contributed significantly to the profitability of BMI. The paper also indicates that, during 1996-2001, BMI’s portfolio has been greatly biased towards short-term based financing. The result of the paper also confirms the hypothesis of the positive relationship between inflation and profitability measure.

Number of Pages in PDF File: 13

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Date posted: January 6, 2011  

Suggested Citation

Asutay, Mehmet and Izhar, Hylmun, Estimating the Profitability of Islamic Banking: Evidence from Bank Muamalat Indonesia (2007). Review of Islamic Economics, Vol. 11, No. 2, pp. 17-29, 2007. Available at SSRN: http://ssrn.com/abstract=1735651

Contact Information

Mehmet Asutay (Contact Author)
Durham University - School of Government and International Affairs ( email )
Durham University
Elvet Hill Rd
Durham, County Durham DH1 3TU
United Kingdom
Hylmun Izhar
Islamic Research & Training Institute, Islamic Development Bank ( email )
P.O. Box. 9201
Jeddah 21413
Saudi Arabia
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