An Assessment of Islamic Banking in Bosnia and Herzegovina – a comparative analysis using the CAMELS approach

Rafał Komorowski; Katarzyna Kubiszewska

doi:10.18778/2082-4440.16.05

Autor

Rafał Komorowski Gdańsk University of Technology, Faculty of Management and Economics, Department of Economic Analysis and Finance
Katarzyna Kubiszewska

DOI:

https://doi.org/10.18778/2082-4440.16.05

Słowa kluczowe:

bankowość islamska, Bośnia i Hercegowina

Abstrakt

W artykule przeprowadzono analizę bankowości islamskiej w Bośni i Hercegowinie. Wprawdzie aż prawie połowa ludności bośniackiej jest pochodzenia islamskiego, to tylko jeden bank funkcjonujący w tym kraju oparł swoją działalność wyłącznie na Szariacie. Celem artykułu jest przeprowadzenie analizy porównawczej sytuacji finansowej tego banku i sektora bankowego zarówno w Bośni, jak i w regionie Bałkanów Zachodnich. Wybrano metodę analizy opartą o system CAMELS, który bada instytucję, biorąc pod uwagę jej najistotniejsze elementy: jakość kapitału, jakość aktywów, zarządzanie w odniesieniu do pracowników, zyskowność, płynność oraz wrażliwość na ryzyko.

Bibliografia

ADIB (2015), ADIB, [Online] Available at: http://www.adib.ae [accessed on: 11/11/2015].
Google Scholar

Agić Z. (2012), Comparison of bank success in Bosnia And Herzegovina and countries in the region in 2012. Available at: http://dx.doi.org/10.7251/akt1321142s.
Google Scholar

Alfaro L., Chanda A., Kalemli-Ozcan S., Sayek S. (2003), FDI Spillovers, Financial Markets and Economic Development, IMF Working Paper, Working Paper No. 03/186: pp. 1–33. Available at: http://dx.doi.org/10.5089/9781451859485.001.
Google Scholar DOI: https://doi.org/10.5089/9781451859485.001

Arestis, P. Panicos, D. (1997), Financial development and economic growth: Assessing the evidence. The Economic Journal 107 (442), pp. 783–799.
Google Scholar DOI: https://doi.org/10.1111/j.1468-0297.1997.tb00043.x

Ariss R.T. (2010), Competitive conditions in Islamic and conventional banking: A global perspective, “Review of Financial Economics”, Vol. 19, pp. 101–108. Available at: http://dx.doi.org/10.1016/j.rfe.2010.03.002.
Google Scholar DOI: https://doi.org/10.1016/j.rfe.2010.03.002

Ashfaq A., Kashif-ur-Rehman, Iqbal Saif M. (2010), Islamic Banking Experience of Pakistan: Comparison between Islamic and Conventional Banks, “International Journal of Business and management”, Vol. 5, No. 2. Available at: http://dx.doi.org/10.5539/ijbm.v5n2p137.
Google Scholar DOI: https://doi.org/10.5539/ijbm.v5n2p137

Awan A.G. (2009), Comparison of Islamic And Conventional Banking In Pakistan, Proceedings 2nd CBRC, Lahore, Pakistan.
Google Scholar

Babic-Hodovic V., Tesche J. (2006), FDI and the Banking Sector in B&H and the Region, International Management Development Association Proceedings, pp. 1–7.
Google Scholar

Babić-Hodović, V., Mehić, E., Agić, E. (2009), Influence of Quantitative and Qualitative Factors of Banking Sector Development on Economic Growth in South East European Countries, Interdisciplinary Management Research, Vol. 5, pp. 683–693.
Google Scholar

Barker D., Holdsworth D. (1993), The Causes of Bank Failures in the 1980s. Research Paper No. 9325.
Google Scholar

Barr R.S., Killgo K.A., Siems T.S., Zimmel S. (2002), Evaluating the productive efficiency and performance of US commercial banks, Managerial Finance, Vol. 28 Issue: 8, pp. 3–25
Google Scholar

Bauer P.W., Berger A.N. (1998), Ferrier G.D., Humphrey D.B. Consistency conditions for regulatory analysis of financial institutions: A comparison of frontier efficiency methods, “Journal of Economics and Business”, Vol. 50.
Google Scholar

BBI (2015a), Bosnia Bank International.About Us, Available at: http://www.bbi.ba/en/static/about-us [accessed on: 11/11/2015].
Google Scholar

BBI (2015b), Bosnia Bank International. Bank Founders, Available at: http://www.bbi.ba/en/static/bank-founders [accessed on: 11/11/2015].
Google Scholar

Beck T., Demirgüç-Kunt A., Merrouche O. (2013), Islamic vs. Conventional Banking: Business Model, Efficiency and Stability, “Journal of Banking & Finance”, Vol. 37 Issue 2, pp. 433–447. Available at: http://dx.doi.org/10.1016/j.jbankfin.2012.09.016.
Google Scholar DOI: https://doi.org/10.1016/j.jbankfin.2012.09.016

Beng S.C., Ming-Hua L. (2006), Islamic banking: Interest-free or interest-based?, Pacific-Basin Finance Journal 17, pp. 125–144. Available at: http://dx.doi.org/10.2139/ssrn.868567.
Google Scholar DOI: https://doi.org/10.2139/ssrn.868567

Bley, J.; Kuehn, K. (2004), Conventional Versus Islamic Finance: Student Knowledge and Perception in the United Arab Emirates, “International Journal of Islamic Financial Services” 5 (4), pp. 17–30.
Google Scholar

Bourkhis K., Sami Nabi M. (2013), Islamic and conventional banks’ soundness during the 2007–2008 financial crisis, “Review of Financial Economics”, Vol. 22, Issue 2, pp. 68–77. Available at: http://dx.doi.org/10.1016/j.rfe.2013.01.001.
Google Scholar DOI: https://doi.org/10.1016/j.rfe.2013.01.001

Cargill, T.F. (1989), CAMEL Ratings and the CD Market,Journal of Financial Services Research 3 (4), pp. 347–358.
Google Scholar

Casu B., Girardone C., Molyneux P. (2006), Introduction to Banking, Prentice Hall, FT, England: Pearsons Education.
Google Scholar

CBBH Annual Report (2010), Central Bank of Bosnia and Herzegovina, Annual Report.
Google Scholar

Cevik S., Charap J. (2011), The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and Turkey, IMF Working Paper WP/11/156. Available at: http://dx.doi.org/10.5089/9781455293704.001.
Google Scholar DOI: https://doi.org/10.5089/9781455293704.001

Chapra U.M. (1992), Islam and the Economic Challenge, Leicester, UK: The Islamic Foundation.
Google Scholar

Chong B.S., Liu M.H. (2009), Islamic banking: Interest-free or interest-based?, Pacific-Basin Finance Journal, No. 17.
Google Scholar

Cole R.A., Gunther J. (1998), Predicting Bank Failures, A Comparison of On-And Off-Site Monitoring Systems, “Journal of Financial Services Research”, 13(2).
Google Scholar DOI: https://doi.org/10.1023/A:1007954718966

Christopoulos A., Mylonakis J., Diktapanidis P. (2011), Could Lehman Brothers’ Collapse Be Anticipated? An Examination Using CAMELS Rating System, “International Business Research”, Vol. 4, No. 2, pp. 11–19.
Google Scholar

Dubai Islamic Bank, 2015. Dubai Islamic Bank, [online] available at: http://dib.ae/ [accessed on: 11/11/2015].
Google Scholar

Efendić V. (2011), Efficiency of the Banking Sector Of Bosnia – Herzegovina with Special Reference to Relative Efficiency of the Existing Islamic Bank, 8th International Conference on Islamic Economics and Finance, Doha – Qatar, 18th–20th December 2011.
Google Scholar

Ergun U., Djedovic I. (2011), Islamic Banking with a Closer Look at Bosnia and Herzegovina: Knowledge, Perceptions and Decisive Factors for Choosing Islamic Banking, 8th International Conference on Islamic Economics and Finance, Doha – Qatar, 18th–20th December 2011.
Google Scholar

Göksu A., Becic A. (2012), Awareness of Islamic Banking in Bosnia and Herzegovina, International Research Journal of Finance and Economics, Issue 100, pp. 26–39.
Google Scholar

Hamid M.A., Azmi S.M. (2011), The Performance Of Banking During 2000–2009: Bank Islam Malaysia Berhad And Conventional Banking In Malaysia, “International Journal of Economics and Management Sciences”, Vol. 1, No. 1, pp. 09–19.
Google Scholar

Hasan M., Dridi J. (2010), The Effects of the Global Crisis on Islamic and Conventional Banks: A Comparative Study, IMF WP/10/2010. Available at: http://dx.doi.org/10.5089/9781455205318.001
Google Scholar DOI: https://doi.org/10.5089/9781455205318.001

IFN Islamic Finance News (2014), IFN Country Analysis – Bosnia, [online] available at: www.islamicfinancenews.com/ifn-country-analysis-bosnia?page=1 [accessed on: 8/10/2014].
Google Scholar

Ika S.R., Norhayati A. (2011), A Comparative Study Of Financial Performance Of Islamic Banks And Conventional Banks In Indonesia, “International Journal of Business and Social Science”, Vol. 2, No. 15, pp. 199–2017.
Google Scholar

International Monetary Fund (2015), IMD eLibrary Data, [online] available at: http://elibrary-data.imf.org/ [accessed on: 11/11/2015].
Google Scholar

Islamic Development Bank (2015), Islamic Development Bank, [online] available at: http://www.isdb.org [accessed on: 11/11/2015].
Google Scholar

Iquibal Z. (1997) Islamic Financial Systems, Finance & Development, pp. 42–45, https://www.imf.org/external/pubs/ft/fandd/1997/06/pdf/iqbal.pdf.
Google Scholar

Iqbal M. (2001), Islamic And Conventional Banking In The Nineties: A Comparative Study, “Islamic Economic Studies”, Vol. 8, No. 2.
Google Scholar

Jaffar M., Manarvi I. (2011), Performance comparison of Islamic and Conventional banks in Pakistan, “Global Journal of Management And Business Research”, Vol. 11, Issue 1.
Google Scholar

Johnes J., Izzeldin M., Pappas V. (2014), A comparison of performance of Islamic and conventional banks 2004–2009, “Journal of Economic Behavior & Organization” 103, pp. S93–S107. Available at:http://dx.doi.org/10.2139/ssrn.2071615.
Google Scholar DOI: https://doi.org/10.2139/ssrn.2071615

Kabir A., Dey S. (2012) Performance Analysis through CAMEL Rating: A Comparative Study of Selected Private Commercial Banks in Bangladesh, “Journal of Politics & Governance”, Vol. 1, No. 2/3.
Google Scholar

Kearney A.T., Korea LLC (2012), The Future of Islamic Banking, Seoul: A.T. Kearney, Inc.
Google Scholar

Khan M., Mirakhor A., (1989), The Financial System and Monetary Policy in an Islamic Economy, Journal of King Abdulaziz University: Islamic Economics, Vol. 1, pp. 39–57. Available at: http://dx.doi.org/10.4197/islec.1-1.2.
Google Scholar DOI: https://doi.org/10.4197/islec.1-1.2

Klepić D. (2009), Islamic Banking – Bosnia and Herzegovina, Trade and Investment Officer, British Embassy Sarajevo.
Google Scholar

Komorowski R., Kubiszewska K., (2014), The UK’s banking system as financial hub for Islamic banking, International Journal of Behavioural Accounting and Finance 4(3), pp. 245–258.
Google Scholar

Lederer G., Contemporary Islam In East Europe, NATO Research Fellowships Programme, 1997–1999 (1999), Camberley: Conflict Studies Research Centre available at: http://www.nato.int/acad/fellow/97-99/lederer.pdf.
Google Scholar

Manshor Amat Taap Siong Choy Chong Mukesh Kumar Tat Kee Fong (2011), Measuring service quality of conventional and Islamic banks: a comparative analysis, “International Journal of Quality & Reliability Management”, Vol. 28, Issue 8, pp. 822–840. Available at: http://dx.doi.org/10.1108/02656711111162505 .
Google Scholar DOI: https://doi.org/10.1108/02656711111162505

Mills P.S., Presley J.R. (1999), Islamic finance: Theory and practice, Macmillan, London.
Google Scholar DOI: https://doi.org/10.1057/9780230288478

Mohamad S., Taufiq H., Bader M.K.I. (2014), Efficiency of Conventional versus Islamic Banks: International Evidence using the Stochastic Frontier Approach (SFA), Journal of Islamic Economics, Banking and Finance, pp. 107–130.
Google Scholar

Moin M.S. (2008), Performance of Islamic Banking and Conventional Banking in Pakistan: A Comparative Study, University of Skovde, http://his.diva-portal.org/smash/get/diva2:113713/FULLTEXT01.
Google Scholar

Nuhanović A. (2014), Specific Risk Management Islamic Banking With Special Reference To Bosnia And Herzegovina, “Journal of Applied Economics and Business”, Vol. 2, Issue 2, pp. 39–50.
Google Scholar

Observatory of Economic Complexity (2015), Observatory of Economic Complexity, [online] available at: http://atlas.media.mit.edu/en/ [accessed on: 8/11/2015].
Google Scholar

Olson D., Taisier A. Zoubi (2008), Using accounting ratios to distinguish between Islamic and conventional banks in the GCC region, The International Journal of Accounting, Vol. 43 Issue 1, pp. 45–65. Available at: http://dx.doi.org/10.1016/j.intacc.2008.01.003.
Google Scholar DOI: https://doi.org/10.1016/j.intacc.2008.01.003

Safiullah Md. (2010), Superiority of Conventional Banks & Islamic Banks of Bangladesh: A Comparative Study, “International Journal of Economics and Finance”, Vol. 2, No. 3. Available at: http://dx.doi.org/10.5539/ijef.v2n3p199.
Google Scholar DOI: https://doi.org/10.5539/ijef.v2n3p199

Sarker A. (2005),CAMEL Rating System in the Context of Islamic Banking: A Proposed ‘S’ for Shariah Framework, “Journal of Islamic Economics and Finance”, Vol. 1, No.1, 2005.
Google Scholar

Shamsher M., Taufiq H., Bader M.K. (2007), Efficiency of Conventional versus Islamic Banks: International Evidence using the Stochastic Frontier Approach (SFA), “Journal of Islamic Economics, Banking and Finance”.
Google Scholar

Siti R.I., Norhayati A. (2011), A Comparative Study Of Financial Performance Of Islamic Banks And Conventional Banks In Indonesia, “International Journal of Business and Social Science”, Vol. 2, No. 15.
Google Scholar

Sudin H., Wan Nursofiza Wan A. (2008), Determinants of Islamic and conventional deposits in the Malaysian banking system, Managerial Finance, Vol. 34, Issue 9 pp. 618 – 643. Available at: http://dx.doi.org/10.1108/03074350810890976.
Google Scholar DOI: https://doi.org/10.1108/03074350810890976

Thomson Reuters Zawya (2015), Thomson Reuters Zawya, [online] Available at: https://www.zawya.com/islamic-finance/ [accessed on: 8/11/2015].
Google Scholar

Torbat, A. E. (2005). Impacts of the US trade and financial sanctions on Iran, The World Economy 28 (3), pp. 407–434.
Google Scholar

Trading Economics (2015), Trading Economics, [online] Available at: http://www.tradingeconomics.com/ [accessed on: 8 11 2015].
Google Scholar

UK Trade & Investment (2014), UK Excellence in Islamic Finance, London: Business is Great Britain.
Google Scholar

Usman A., Khan M.K. (2012),Evaluating the Financial Performance of Islamic and Conventional Banks of Pakistan: A Comparative Analysis, International Journal of Business and Social Science, Vol. 3, No. 7.
Google Scholar

Warde, I. (2000), Islamic finance in the global economy, Edinburgh: University Press.
Google Scholar DOI: https://doi.org/10.3366/edinburgh/9780748612161.001.0001

The World Bank (2015), The World Date Bank’s Databank, [online] Available at: http://data.worldbank.org/country/bosnia-and-herzegovina [accessed on: 8/11/2015].
Google Scholar

Zulkifli, H. (2010), Islamic banking and finance in Bosnia and Herzegovina, [online] Available at: https://zulkiflihasan.wordpress.com/2010/09/29/islamicbanking-and-finance-in-bosnia-and-herzegovina/ [accessed on: 8/11/2015].
Google Scholar