Business, Management and Accounting
4 years ago

Islamic banks prove profitable and stable, challenging traditional financial systems.

MPRA Paper
Risk and profitability of islamic banks: a religious deception or an alternative solution?
Naama Trad, Mohamed Ali Trabelsi, Jean-François Goux

Paper Summary

Islamic banks were studied to see if they are a good alternative to traditional banks during financial crises. The study looked at 78 Islamic banks in 12 countries from 2004 to 2013. They found that bank size and capital are important for Islamic banks to make profits and stay stable. However, liquidity and asset quality didn't always show clear results. Economic factors, except inflation, can help Islamic banks stay stable. Overall, Islamic banks are similar to traditional banks in terms of profits and risks.

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