Soundness of Palestinian Banks- 10 Years Based Analysis
Journal Title: IOSR journal of Business and Management - Year 2018, Vol 20, Issue 8
Abstract
The purpose of this paper is to evaluate Palestinian banks soundness based on CAMEL approach for ten years (2008 to 2017) then ranked Palestinian banks overall performance accordingly. Furthermore, we compared the performance between conventional and Islamic banks according to CAMEL indicators. Particularly, as a soundness performance; we find that from 2008 to 2017 the Palestinian banks have committed to Basel and national standards in terms of capital adequacy level, from 2010 to 2017 all banks have had a declining trend of impaired loans level and from 2011 to 2017 all banks have had a stable profitability. While, as a decline in management performance; we find that from 2011 to 2017 all banks have had an increasing trend of interest expenses level and from 2008 to 2017 all banks have had a declining trend of liquid assets level. Additionally, using FGLS and OLS regression analysis, we find that conventional banks have higher (better) capital adequacy levels than Islamic banks, while Islamic banks have lowest (better) interest expense levels than conventional banks. Furthermore, the results show that as a bank’s size increases the capital adequacy level, the impaired loans level and the liquidity level decrease, while the earning ability increases. Importantly, we find that Palestinian banks during war times made prudent policies by maintaining relatively high liquidity levels during disturbance times. Finally, based on the composite ranking indicator “overall performance” Palestine Investment Bank has got place number 1. Arab Islamic Bank has got place number 2. Palestine Islamic Bank has got place number 3. Bank of Palestine and National Bank have got place number 4. Finally, Quds Bank has got place number 5.
Authors and Affiliations
Yarob Kullab, Chen Yan
Keywords
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- EP ID EP412268
- DOI 10.9790/487X-2008011629.
- Views 92
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