Analyzing the Financial Performance of Islamic Banks: A Case Study for Islamic Banks Experience in Jordan

A Case Study for Islamic Banks Experience in Jordan

الملخص

Jordan has many diverse banks are working in the financial and banking system, some of them are commercial traditional banks and others are Islamic banks. This study analyzed local Jordanian and foreign Islamic banks work in Jordan. The measured variables are return on each of assets, investments, equity as presenters for banking profitability performance as financial conduct. 

The explanatory variables are liquidity, equity, debt, default risk, inflation, gross domestic product, unemployment. After conducting the statistical and financial analysis we reached to significant impact from all explanatories on measured variables. Positive impact results are from liquidity (0.01), equity (0.05), and gross domestic product GDP (0.05), but negative impact results are debt (0.01), default risk (0.01), inflation (0.01), and unemployment (0.05).

Finally, the research advise the banking system in Jordan to focus and analyze the financial ratios periodically to recognize their impact and role on banking and finance areas, and to make decisions for future plans.

Keywords: Default risk, financial analysis, Islamic Banks, local Banks, unemployment.

JEL Classifications: G0, G2.