A Financial Stability of Islamic Banks: Evidence from selected Asian Countries

Abstract

This paper is concerned with exploring the financial strength of Islamic banks in Pakistan, Bangladesh, the United Arab Emirates, and Saudi Arabia based on bank size. Using a panel regression technique, the paper also compares the financial strength of Middle Eastern and South Asian Islamic banks and finds that, based on cost-to-income ratio, loan-to-assets ratio, and certain control variables, Middle Eastern banks are financially stronger than their South Asian counterparts. The study is a pioneer in analyzing this issue at an inter-country level.