Islamic banks' profitability boosted by equity financing, hindered by operating efficiency.
The study looked at what factors affect how profitable Islamic banks are in Asia and Africa. They used data from 44 banks in 2013 and found that operating efficiency can lower profits, while using equity financing can increase profits. Credit and liquidity risks don't have much impact on profits. Inflation can boost profits, but GDP growth doesn't really affect how much money Islamic banks make.