The Asset and Liabilities Gap Management of Conventional and Islamic Banks: An Empirical Study of Pakistan, UAE, Malaysia, and Bahrain

Hunjra, A. I., Faisal, F., Abdeen, Z., Kamal, A., Ghufran, M., & Bashir, A. (2017). The Asset and Liabilities Gap Management of Conventional and Islamic Banks: An Empirical Study of Pakistan, UAE, Malaysia, and Bahrain. Journal of Islamic Business and Management , 7(2), 266-282

17 Pages Posted: 30 May 2018

See all articles by Ahmed Imran Hunjra

Ahmed Imran Hunjra

University of Waikato; Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Farida Faisal

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS) - Department of Management Sciences

Zain-ul Abdeen

PMAS-Arid Agriculture University, Department of Management Sciences, Students

Azfar Kamal

PMAS-Arid Agriculture University, Department of Management Sciences, Students

Muhammad Ghufran

PMAS-Arid Agriculture University, Department of Management Sciences, Students

Aamir Bashir

PMAS-Arid Agriculture University, Department of Management Sciences, Students

Date Written: 2017

Abstract

The purpose of this study is to determine the Gap between the assets and the liabilities of Islamic and conventional banks. It also finds the impact of liquidity risk, capital adequacy, management efficiency, operating cost, and transaction size on net interest margin for Conventional Banks (CBs) and net profit margin for Islamic Banks (IBs) in Pakistan, Malaysia, Bahrain, and UAE. Short-term and long-term assets and liabilities gap is further emphasized in this study. Data were extracted from the financial statements of both types of banks for the period of 2008-2014. This study finds that there is a negative short-term gap for both types of banks while the long-term gap for both types of banks is positive. Results show that the operating cost is an important factor which affects the profit margins and progress quality of the management of banks. Finally, the overall results show that the CBs have better assets and liabilities structure of profitable assets at low cost liabilities.

Keywords: Asset Liability Management, Capital Adequacy, Liquidity Risk, Operating Cost, Transaction Size, Net Interest Margin, Net Profit Margin

JEL Classification: E44, G21, G32

Suggested Citation

Hunjra, Ahmed Imran and Faisal, Farida and Abdeen, Zain-ul and Kamal, Azfar and Ghufran, Muhammad and Bashir, Aamir, The Asset and Liabilities Gap Management of Conventional and Islamic Banks: An Empirical Study of Pakistan, UAE, Malaysia, and Bahrain (2017). Hunjra, A. I., Faisal, F., Abdeen, Z., Kamal, A., Ghufran, M., & Bashir, A. (2017). The Asset and Liabilities Gap Management of Conventional and Islamic Banks: An Empirical Study of Pakistan, UAE, Malaysia, and Bahrain. Journal of Islamic Business and Management , 7(2), 266-282. Available at SSRN: https://ssrn.com/abstract=3181051

Ahmed Imran Hunjra (Contact Author)

University of Waikato ( email )

Te Raupapa
Private Bag 3105
Hamilton, 3240
New Zealand

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS) ( email )

Muree Road Rawalpindi
Shamsabad, Punjab 44000
Pakistan
00923457162527 (Phone)

Farida Faisal

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS) - Department of Management Sciences ( email )

Pakistan

Zain-ul Abdeen

PMAS-Arid Agriculture University, Department of Management Sciences, Students

Pakistan

Azfar Kamal

PMAS-Arid Agriculture University, Department of Management Sciences, Students

Pakistan

Muhammad Ghufran

PMAS-Arid Agriculture University, Department of Management Sciences, Students

Pakistan

Aamir Bashir

PMAS-Arid Agriculture University, Department of Management Sciences, Students

Pakistan

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