The effects of internal governance factors on lending portfolio composition in Islamic banks
Nizar Yousef Ahmed Naim and Nora Azureen Abdul Rahman
Recent studies indicate that lending portfoliocomposition in Islamic banks is concentrated towardsdebt-based lending portfolio; however, the ideal lending portfoliocomposition in Islamic banks should be an equity-based lending portfolio. This article explores the effects of the internal governance factors on lending portfolio compositionofIslamic banks in the GCC Region. The internal governance factors investigated are board of directors’ characteristics (size and independence), Shariah supervisory board attributes (size and cross-membership), and ownership structure (family and government). The generalized least squares (GLS) method is used to examine the relationship between the study variables. The results indicate that two characteristics of the board of directors, size and independence, and two attributes of the Shariah supervisory board, Shariah board size and Shariah board cross-membership, have significant effects on lending portfolio composition of Islamic banks in the GCC Region. However, the rest of the internal governance factors have no effects on lending portfolio composition of Islamic banks in the GCC Region. These significant results add new contributions to the literature in the area of internal corporate governance of Islamic banks. The article concludes with suggestions for regulators and policy makers in the GCC Region with regard to the ideal characteristics of the board of directors and the optimal attributes of the Shariah supervisory board in Islamic banks as well as directions for future studies in this area of research.
Year of publication: |
2023
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Authors: | Nizar Yousef Ahmed Naim ; Nora Azureen Abdul Rahman |
Published in: |
International Journal of Financial Studies : open access journal. - Basel : MDPI, ISSN 2227-7072, ZDB-ID 2704235-2. - Vol. 11.2023, 3, Art.-No. 85, p. 1-16
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Subject: | portfolio | banks | ownership structure | corporate governance | board of directors | Corporate Governance | Corporate governance | Eigentümerstruktur | Ownership structure | Portfolio-Management | Portfolio selection | Islamisches Finanzsystem | Islamic finance | Bank | Kreditgeschäft | Bank lending |
Saved in:
freely available
Type of publication: | Article |
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Type of publication (narrower categories): | Aufsatz in Zeitschrift ; Article in journal |
Language: | English |
Other identifiers: | 10.3390/ijfs11030085 [DOI] |
Classification: | G11 - Portfolio Choice ; G21 - Banks; Other Depository Institutions; Mortgages ; G32 - Financing Policy; Capital and Ownership Structure ; G34 - Mergers; Acquisitions; Restructuring; Corporate Governance ; G39 - Corporate Finance and Governance. Other |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014420389
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