Quarterly Studies in Banking Management and Islamic Banking

Abstract The aim of this study is to investigate the effect of risk on the efficiency of banks using data coverage analysis. The statistical population of this study includes banks listed on and active in the Tehran Stock Exchange in the fiscal years 2012 to 2023. The collected data was examined using Excel software and then Deap software. This study is an applied research type. There are many methods in the field of applied research, the most important of which are historical, descriptive, correlational, causal (post-event), and experimental. In descriptive analysis, central and dispersion statistical indices are used; in inferential analysis, mixed regression is used to test the research hypotheses based on econometric models, and classical regression is used considering all assumptions. To examine the effect of risk on bank efficiency, after collecting the required data from the sampled banks, the researchers employed the data coverage analysis method to calculate the efficiency of each bank. Also, to examine the effect of risk on the efficiency of the banks under study in the years 2013 to 2022, the researchers estimated a model using the panel data regression econometric method for the three risks under study. The results reveal that there is no significant relationship between the risks under assessment and the efficiency of the banks.
 

Abstract Banks are the most important financial market institutions in the country that can play an effective role in economic development. The main purpose of this study is to estimate the efficiency, effectiveness, and productivity of Sepah Bank branches, located in Tabriz, Iran, using the method of Network Data Envelopment Analysis (NDEA). Another purpose is to investigate the financial imbalance of these branches using the ordinary least squares method. The results of this study indicate that the most efficient branches or the most effective branches are not necessarily in good conditions in terms of productivity. In other words, the efficiency of branches does not necessarily mean their productivity, whereas the most productive bank branches definitely operate at a high level of efficiency and effectiveness. On the other hand, an inverse relationship is revealed to exist between these branches' income-cost imbalance and their productivity.

Abstract Banks are one of the most important institutions and an essential element of the financial system of any economy as they play a decisive role in economic development and growth. The role of banks as intermediaries in attracting deposits and redistributing them in the form of investment and granting facilities, if done efficiently, will be able to provide the necessary basis for achieving economic growth and development. Therefore, there is always the question about the performance of banks, to what extent and degree of efficiency do banks operate in an economy, and what are the factors influencing them? On the other hand, due to the global financial crisis of 2007-2008, caused by banks' excessive risk-taking, risk-taking is recognized as an influential factor in the banking production process, which should be properly considered in performance measurement models. Therefore, in this study, a random boundary model with random inefficiency coefficients has been used, which can identify the effects of environmental factors such as inflation rate and exchange rate fluctuations on inefficiency. It also shows the role of risk-taking in designing inefficiencies and the various effects of risk on efficiency. To estimate the model, the data of 16 banks from the years 2006 to 2018 have been used according to the available data. Based on the results; Increasing inflation and exchange rate and credit risk have a negative effect and increasing capital risk and market risk have a positive effect on the efficiency of banks.

Abstract The present study investigates the effect of efficiency and diffusion of innovation theories on customers’ beliefs in the acceptance of digital banking. The present study is practical in terms of purpose since it analyzes the current status of research variables using past data collection. It is a survey study in terms of the data collection method and descriptive-casual in terms of implementation. To find the answers to the questions of the research, data from 197 distributed questionnaires were analyzed using Smart PLS software. Findings stated that efficiency-based beliefs have a positive and significant effect on the acceptance of digital banking, and also the diffusion of innovation theory has no significant effect on the acceptance of digital banking.

Abstract Several operational models for Islamic banking have been implemented in Muslim as well as non-Muslim countries. Islamic banking activists can learn a wide range of helpful lessons from these implementations. One of the countries in which Islamic banking has been implemented is Indonesia, which has the largest Muslim population. It has a dual banking system. In other words, in this system, both Islamic banks and conventional banks cooperate with each other. Since Iran is reviewing its banking law, an analysis of their banking model can be helpful. By using library and Internet resources, this descriptive-analytic study investigates the validity of this hypothesis: Indonesian Islamic banking is relatively comprehensive, legitimate, and efficient. According to this study, there are some shortcomings as far as being comprehensive in mobilization is concerned. Moreover, the bank cannot meet the needs of those who are willing to invest in the bank to “contribute to good deeds” or the ones who would like to “receive fixed interest rates”. With respect to resource allocation, Indonesian Islamic banking cannot fulfill institutions needs for “paying for services” and “buying intangible assets, such as equity and so forth”. This banking model extensively makes use of Mudaraba contract, which is illegitimate according to prominent Shiite and some Sunni scholars. Moreover, it exploits loan agreement in settling the accounts of bank guarantees which is not in line with the essence of banking activity that aims at gaining economic benefits. On the whole, this paper sheds light on some of the important aspects of Indonesian Islamic banking which can be helpful in reviewing the regulations of Iranian banking system.

Abstract  Since the banks are important influential sections in the development of every country, it is important to evaluate their performance. Data Envelopment Analysis (DEA) is one of the common tools used for evaluating banks performance. The focus of this paper is mainly to evaluate the efficiency of decision making units over a specific time period. To analyze the changes in efficiency, Window DEA based on the input-oriented model is used under the assumption of non-decreasing return to scale (NDRS). This research identified the most efficient and inefficient 3rd degree branches of Bank Sepah in Mashhad during 2008 to 2013. Input included personnel costs and the total deposits attracted, and output included granted loans and the amount of gross profit of branches. Based on the results of window analysis, 6 out of 39 3rd degree branches of Bank Sepah in Mashhad had an average efficiency of 1. In addition, 70% of 3rd degree branches of Bank Sepah had efficiencies of over 0.72 and also their average efficiency was 0.78 during 6 years. It is notable to mention that 70% of these branches enjoy the efficiency of over 0.80 with an average efficiency of 0.87 in four windows.

Abstract Considering the trend of privatization of state-owned banks in Iran, it is important to know the effects of privatization on the performance of banks of which ownership has transferred to private sector. Thus, this research attempts to compare the technical efficiency and productivity of Iranian banks, before and after privatization. The studied sample includes 6 state-owned banks, 5 state-owned banks which their ownership has transferred to the private sector and 7 privately owned banks in the period of 2007-2011. Data Envelopment Analysis (DEA), Malmquist Productivity Index and Panel Data (Combined Time Series) were used with the help of DEAP and Evewis software. In order to determine the input and output variables, 2 different models have been selected based on an intermediary perspective: the income approach and the value-added approach. The findings of the statistical analyses suggest that bank productivity has grown after privatization. Managerial efficiency of privatized banks has dropped in the income approach after privatization and managerial efficiency of privatized banks has increased in the value-added approach. In fact, the performance of these banks has improved in mobilizing resources. The results of panel regression model suggest that private ownership, bank size and the visual deposit to total deposits ratio is positively related to technical efficiency and the deferred claims to facility ratio is negatively related to technical efficiency.

Abstract Today, banks are looking for performance improvement methods to surpass their competitors to increase market share and profitability. Since one of the most important issues and concerns for the banks are profits and returns, they use a variety of methods to attract more customers. Base on this reason, performance evaluation of banks is very crucial and important not only for their investors and depositors, also for their managers. This study examines the factors affecting the profitability of Iranian private banks in the period of 2006 to 2014 and focuses on the financial factors to increase the efficiency by the bank managers. The study is a correlational research and was conducted using analysis of historical data. In this study, according to 3 independent variables (size of the bank, operating efficiency, asset management), 6 hypotheses were formulated. The results show that there exists a significant relationship between the independent variables and profitability criteria (net interest income and return on assets of the banks). To test the research hypotheses, multivariate linear regression and panel data analysis were utilized.

Abstract Risk assessment is one of the main concerns of commercial banks when granting loans. Although there are several methods including financial ratios to assess the credit risk of customers, the aim of this article  is to apply several financial and performance indicators to assess legal customors credit risks. The statistical population of this study consists of 212 companies active in three industries (automotive, food and leather) during the time period of  2011-2013 which borrowed more than 1 Billion Rials from the Bank Mellat of East Azarbaijan Province. To measure the credit risk, we used the company’s efficiency along with financial ratios. Logistic regression was applied to test the hypotheses. The results show that the efficiency has highest predictive power than the other profitability ratios to forecast the default of loans. However, among the financial ratios, only company size (sales) was significant.