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This paper aims to examine the effect of state ownership on bank performance for all banks in the Gulf Cooperation Council (GCC) countries during the period 2003 – 2018, for two distinct banking systems: the conventional and the Islamic banking systems.

To achieve the goal of the study, this paper uses a mean t-test to examine the mean difference of the related variables for both banking systems, and a regression test (using the GMM method) to explore the effect of state ownership on bank performance.

The most important result of the analysis is that state ownership has a significantly positive influence on bank performance for conventional banks but not for Islamic banks, in the GCC area.

This study adds to the scarce related literature comparative empirical results with respect to the impact of ownership on the performance of two different banking systems: the conventional system and the Islamic banking system in the GCC area. This study is likely to have implications for policymakers in terms of developing rules relevant to the governance of GCC’s two banking systems that can help to support the stability of the whole banking sector.

The purpose of this paper is to investigate the performance of Islamic banks in developing countries from 2007 to 2010 which includes the period of the financial crisis by empirically examining the way in which the macroeconomy affected Islamic banking performance (IBP) in developing countries. The empirical examination involves two approaches of measuring performance: Sharia-based and conventional-based performance measurement.

For this paper, the authors have utilized a Data Stream/Bank Scope database and data from the Bank Negara Malaysia (Malaysian Central Bank) to collect a panel set of annual financial information for Islamic banking from the year 2007-2010. The initial sample covers 34 Islamic banks from developing countries that are listed on the International Islamic Service Board. Furthermore, the authors adopted only those listed Islamic banks to tackle the data availability issue. The authors’ final sample comprised 136 observations with complete data as the numbers of Islamic banks in developing countries are low in comparison to their conventional peers. The financial crisis dummy follows America’s commonly used National Bureau of Economic Research timeline for the financial crisis. The authors also used the method of a generalized least square (GLS) method of pooled panel data analysis regression model. The rationale for employing the GLS technique was made on the basis of the ability of GLS to give less weight to the error term that is closely clustered around the mean, to improve the goodness of fit and to remove autocorrelation compared with normal, random, and fixed effect models.

The authors of this paper found that the macroeconomic factors reflected in gross domestic product, gross domestic product growth, and inflation rate have a significant positive relationship with the return on assets. In addition, a significant negative relationship was found between the financial dummy and IBP in developing countries. On the other hand, it failed to find evidence of a relationship between the macroeconomic factors and performance including the legal system and the financial crisis dummy, when the performance is reflected by the Zakat ratio. The result embedded that the financial crisis had an impact on the performance of Islamic banks in developing countries when viewed from the conventional banking perspective. The financial crisis played a role in reducing the profitability of Islamic banks which is consistent with a previous study by Hasan and Dridi (2011). However, in the view of Sharia, the financial crisis did not have any effect on IBP; even the macro factors did not have any effect on the level of performance.

There are possible explanations for these contradictory coefficient signs. First, the contradictory signs of the coefficient for the same independent variable that was regressed with different dependent variables show that researchers would need to take caution in using the right indicators when measuring IBP. Conventional indicators bring different results in comparison to Islamic indicators (Badreldin, 2009; Mudiarasan. Kuppusamy, 2010; Zahra and Pearce, 1989). Second, Richard et al. (2009), having reviewed performance measurement-related publications in five of the leading management journals (722 articles between 2005 and 2007), suggested that the past studies reveal a multidimensional conceptualization of organizational performance with limited effectiveness of commonly accepted measurement practices. Accordingly, these studies call for more theoretically grounded research and debate for establishing which measures are appropriate in a given research context. Today, there is a general consensus that the old financial measures are still valid and relevant (Yip et al., 2009). However, these need to be balanced with more contemporary, intangible, and externally oriented measures. It has been argued that various researchers working in their own disciplines using functional performance measures (such as market share in marketing, schedule adherence in operations and so on) ought to link their discipline to focused performance measures of overall organizational performance.

Islamic banking has unique characteristics in comparison to conventional banking and this paper examines the differences between the two and also investigates the resilience of Islamic banks during a period of economic turbulence. Furthermore, due to these unique characteristics, a comparison cannot be made by using the conventional performance measures alone. In addition, amid the in-depth studies examining the resilience of Islamic banks during periods of economic crises, there are instances of theoretical disagreement in the extant empirical literature examining finance and economics. In that regard, the majority of the existing literature is either based on advanced markets or countries where the majority of the population practices the faith of Islam, and little is known about the performance of Islamic banking from the pooled emerging markets; particularly in developing countries.

Introducing Zakat as a performance measurement in Islamic banking context relating it to macroeconomic factors enhances the thinking of new research in Islamic theory about bank performance.

The purpose of this paper is to apply various data mining techniques for predicting the financial performance of Islamic banking in Indonesia through the main exogenous determinants of profitability by choosing the best data mining technique based on the criteria of the highest accuracy score of testing and training.

This paper used data mining techniques to predict the financial performance of Islamic banking by applying all of LASSO regression, random forest (RF), artificial neural networks and k-nearest neighbor (KNN) over monthly data sets of all the full-fledged Islamic banks working in Indonesia from January 2011 until March 2020. This study used return on assets as a real measurement of financial performance, whereas the capital adequacy ratio, asset quality and liquidity management were used as exogenous determinants of financial performance.

The experimental results showed that the optimal task for predicting the financial performance of Islamic banking in Indonesia is the KNN technique, which affords the best-predicting accuracy, and gives the optimal knowledge from the financial performance of Islamic banking determinants in Indonesia. As well, the RF provides closer values to the optimal accuracy of the KNN, which makes it another robust technique in predicting the financial performance of Islamic banking.

This paper restricted modeling the financial performance of Islamic banking to profitability through the main determinants of return of assets in Indonesia. Future research could consider enlarging the modeling of financial performance using other models such as CAMELS and Z-Score to predict the financial performance of Islamic banking under data mining techniques.

Owing to the lack of using data mining techniques in the Islamic banking sector, this paper would fill the literature gap by providing new effective techniques for predicting financial performance in the Islamic banking sector using data mining approaches, which can be efficient tools in business and management modeling for financial researchers and decision-makers in the Islamic banking sector.

According to the author’s knowledge, this paper is the first that provides data mining techniques for predicting the financial performance of the Islamic banking sector in Indonesia.

This paper aims to analyze the scientific trend of research on Islamic banking sustainability (IBS) through a bibliometric study. In particular, the paper extensively investigates all the articles issued through the Scopus database regarding the IBS.

The authors discovered 76 papers that met the function, subject and set requirements by using the phrase IBS. The authors used VOSviewer as an analytical tool and the Scopus website.

IBS publications were found in the period 2005–2022, and the publication trend of IBS research demonstrates that it is growing exponentially after 2018. Malaysia is the leading country in terms of productive authors, universities, number of documents, citations and collaboration research on IBS. The current research trends are summarized into five cluster maps for future research directions: sustainability measurement, sustainability practices, risk and governance, corporate social responsibility (CSR) and IBS theory. The Maqashid al Shariah approach conceptually influences the framework for constructing the dimensions and indicators used to measure the IBS.

The authors retrieved data for their research from the Scopus database; using other databases might result in totally different research patterns with this IBS bibliometric research.

The research encompasses valuable implications for Islamic banking as it offers valuable insights on how to assess the performance of IBS. Particularly, it contributes to identifying the dimensions and indicators needed to measure IBS performance. Furthermore, this research provides strategic initiatives to promote sustainable practices in Islamic banking in terms of green financing taxonomy, services, operations, risk management and governance.

This research is valuable for other scholars as it offers a foundation for the future growth of IBS research, focusing on important sustainability clusters obtained from selected reputable journals. This research is beneficial for regulators in enhancing the roadmap for establishing and enhancing long-term IBS with impacts on socio-economic, environmental and governance.

The study presents a concise review of the bibliometric study in IBS and provides recommendations for future research directions in cluster mapping of themes and subthemes. There is still insufficient research that examines the IBS, in particular, complete insights into the IBS literature review.

The purpose of this study is to develop an Islamic Banking Index representing the Islamic banking model and to investigate its impact on the performance of Islamic and conventional banks. This study also analyzes the impact of Islamic financial development on bank performance.

The authors collected the data from 23 countries for the period from 2010 to 2018 and developed a composite Islamic Banking Index. The authors applied the generalized method of moments on 3,542 bank-year observations for both Islamic and conventional banks to analyze the impact of the Islamic Banking Index on bank performance. The results of the study are robust to time-fixed effects, country-level time-varying factors and endogeneity issues.

The authors found that Islamic Banking Index positively contributes to the return on assets (ROAit) of Islamic banks only. This impact becomes highly significant in countries with comparatively higher Islamic financial development. This finding suggests that the Islamic financial development in a country provides a supportive operating environment to Islamic banks and increases their performance. The authors also found that Islamic Banking Index positively contributes to the return on equity (ROEit) of both types of banks.

The authors argue that moving away from interest-based products and focusing more on diversified portfolios can boost the performance of both types of banks without increasing their risk levels.

To the best of the authors’ knowledge, this is the first study that develops a composite Islamic Banking Index based on differentiating factors of the Islamic banking model and investigates the impact of Islamic Banking Index and Islamic financial development on bank performance.

Shari’ah is the foundation of Islamic banks. Although all the Islamic banks required complying with the Shari’ah requirements fully, the level of compliance differs among the Islamic banks. At the same time, Islamic banks have been performing well, but all do not demonstrate similar financial performance. This paper aims to explore whether Shari’ah compliance efficiency makes any difference in financial performance of Islami Bank Bangladesh Limited (IBBL).

This study used IBBL as a case. For exploring the issue of study, this paper applied an e-mail interview approach and interviewed 24 interviewees including financial analysts, IBBL clients and executives of regulatory bodies, the IBBL and other Islamic- and interest-based traditional banks. Interview opinions are then analyzed and interpreted for a deeper understanding of the topic.

The study observed that some other factors influence the financial performance of IBBL, but Shari’ah compliance is the dominant instinct of acquiring the leading position. Superior Shari’ah compliance creates internal strengths and external opportunities that facilitate IBBL in achieving higher financial performance. Most interviewees argued that Shari’ah is the only disposition that makes IBBL unique. Moreover, the bank that considerably follows Shari’ah gets better financial outcomes.

The study used a qualitative method using interview responses only for evaluating the relationship between Shari’ah compliance and financial performance. Further study may be conducted based on a quantitative approach.

This paper expects to uphold the significance of Shari’ah in improving the financial performance of IBBL and simultaneously motivating the parties associated with the Islamic banks in enhancing the level of Shari’ah compliance. Moreover, this study provides new insights into the importance Islamic banks and their performance in relation to the choice of customers.

This study explores the significance of Shari’ah compliance in creating avenues for greater financial performance and develops a model showing the ways how Shari’ah compliance leads Islamic banks to achieve higher financial positions.

This paper aims to investigate the impact of market structure and market share on the performance of the Islamic banks operating in the Iranian banking system based on the structure-conduct-performance (SCP) paradigm.

The Iranian Islamic banking system’s market structure is evaluated by using the econometrics method to test the validity of the traditional SCP paradigm. For this purpose, the authors estimate a simple regression model that is consisted of several independent variables, such as the market share, bank size, real gross domestic product, liquidity and Herfindahl-Hirschman index as a proxy variable for concentration and one dependent variable, namely, the profit as a proxy for performance. The panel data includes a data sample of 22 Islamic banks operating from 2006 to 2019. Data are extracted from the balance sheet of Islamic banks and the time-series database of the Central Bank of Iran and World Bank.

The study’s findings indicate that both concentration and market share have a positive impact on the performance of banks in the Iranian Islamic banking system. This result is contradicted with both traditional SCP and efficient structure hypotheses; however, it confirms the existence of oligopoly or cartel in the Iranian Islamic banking system that few banks try to gain the highest share of profit and maintain their market share by colluding with each other. This result is in contradiction with other research studies about the market structure in the Iranian banking system that claimed that banks in Iran operate under monopolistic competition. In addition, it shows that the privatization of some banks in Iran does not improve and help competition in the Iranian banking system.

This paper is a pioneer empirical study analyzing the market structure, concentration and collusion based on the SCP paradigm in Iranian Islamic banking. The results of the study support the existence of collusive behavior among the Islamic bank in Iran that is not aligned with Sharia. This study clearly shows the difference between ideal Islamic banking and Islamic banking in practice in Islamic countries. This clearly indicates that only prohibiting some operations like receiving interest, gambling and bearing excessive risk is not enough. In fact, the Islamic banking system should be based on the Sharia rule in all aspects and much more modification and study have to be done to achieve an appropriate Islamic banking system. These possible modifications to overcome the issues of cartel-like market structure and collusive behavior in the Iranian Islamic banking system include making the Iranian banking system more transparent, letting foreign banks enter the Iranian banking system and minimizing the government intervention in the Iranian banking system.

The purpose of this study is to assess and contrast the impact of various factors, including both bank-specific and macroeconomic factors, on the financial performance of Islamic and conventional banks (I&CB) in countries with a dual banking system.

A general least square model is applied to a large data set of 103 I&CB operating in the Middle East and North Africa (MENA) region, comprising unbalanced annual panel data spanning the period from 2015 to 2020. The financial performance index (FPI) derived from capital adequacy, asset quality, management efficiency, earnings, and liquidity (CAMEL) ratios is used as the dependent variable.

Key factors, such as overhead expenses, gross domestic product (GDP) and retained earnings, exert a substantial influence on the financial performance of both I&CB. Moreover, the findings suggest that certain parameters, including deposits, inflation and cellular banking usage, significantly impact on the financial performance of conventional banks, while bank size specifically affects the financial performance of Islamic banks.

While this study provides valuable insights, it is essential to acknowledge its limitations. The research focuses on a specific region (MENA) and may not be universally applicable to other geographical areas or banking systems. The study’s findings are based on historical data and might not fully reflect current or future market conditions. Additionally, the choice of variables and methodology may introduce bias or limitations, as with any empirical study. The theoretical implications of the research paper lie in the distinct ethical principles that constitute the foundation of Islamic finance. The ethical opposition to Riba is poised to have extensive implications, influencing market stability, commercial and economic impact and contributing to responsible banking practices within the Islamic banking sector. The study suggests that adherence to these sacred principles not only aligns with ethical considerations but also fosters social responsibility within Islamic banking institutions. This holds significance for broader societal and economic impacts, as responsible banking practices contribute to sustainable and equitable economic development.

The study underscores the significance of efficient overhead cost management for conventional banks, particularly in the context of a rapidly evolving digital banking environment. The call for adaptation and innovation in operational strategies aligns with the broader principles of efficiency and effectiveness emphasized in Islamic finance.

In essence, the theoretical and practical implications of the study surpass the narrow focus on financial performance, resonating with the broader societal and economic landscape within the Islamic banking sector. The integration of ethical principles not only reinforces the unique identity of Islamic finance but also positions it as a model for responsible and sustainable banking practices in the MENA region and beyond.

CAMEL ratios are used to build an FPI to evaluate bank performance, providing a more precise and comprehensive assessment compared to traditional return ratios like return on assets or return on equity. Second, the authors conduct a thorough analysis covering factors across bank-specific, financial and macroeconomic dimensions. Thus, the study stands out by not only examining bank-specific factors but also by considering external factors such as GDP, interest rates and the development of the financial sector. The focus on the MENA region allows us to offer generalizable findings, highlighting distinctions between I&CB and considering a period with boom years (2015–2019) and a recession year (2020).

This study aims to investigate the impact of trust in the metaverse on the Islamic banking sector, particularly in facilitating market success. Additionally, it seeks to explore the relationship between metaverse-driven brand image, product features, service quality and overall performance in the market.

Data were collected from 187 participants in Jordan, with the SmartPLS software used to test the hypotheses.

The findings reveal a significant impact of metaverse-enhanced brand image, product features and service quality on Islamic banking market performance. Furthermore, customer trust in the metaverse plays a significant role in shaping the relationship between product features, service quality and Islamic banking market performance.

The study’s practical implications still suggest the need for a more holistic metaverse-driven approach. Investing in service quality initiatives alone may not adequately build and sustain customer trust in the metaverse. Instead, transparent communication on ethical practices in the metaverse is required to reinforce trust and magnify the positive influence of superior service quality in the metaverse.

This paper aims to examine a model that uses customer service quality as an intervening mechanism in the relationship between customer relationship management (CRM) practices and organizational performance in two different banking structures: conventional and Islamic. The study focuses on organizational and technological practices of CRM, as both have been demonstrated to be critical to CRM success.

The analysis is based on responses from 247 managers from conventional banks and 141 managers from Islamic banks operating in Morocco using a self-administered questionnaire. The partial least squares structural equation modeling (PLS-SEM) technique is employed for data analysis.

Findings demonstrate that customer service quality plays a mediating role between CRM practices (organizational and technological) and organizational performance in both conventional and Islamic banks. Our results confirm the positive impact of CRM practices on organizational performance in the two banking structures.

This study enhances our understanding of how CRM practices contribute to improving customer service quality and organizational performance in both conventional and Islamic banks. Bank managers, who aim to deliver superior service quality and achieve customer satisfaction and retention, should capitalize on the benefits of implementing CRM organizational and technological practices.

The present paper bridges a gap pertaining to key practices and factors that impact CRM success in the banking industry. It is the first of its kind to investigate the effect of CRM practices on organizational performance with customer service quality as a mediating variable. The study also contributes to the field of CRM literature, as CRM has rarely been addressed in an Islamic banking context.