Banks In Bahrain Research Articles

Insights into financial reporting practices in the metaverse: evidence from Islamic financial institutions in Bahrain

Purpose This study aims to assess how prepared and flexible accounting professionals are to produce financial accounts that adhere to Shariah regulations in the metaverse. The study also highlights the potential positive and negative effects of metaverse utilization on the financial reporting quality of Islamic financial institutions (IFIs). Design/methodology/approach A questionnaire was distributed to a random sample of 102 accounting professionals employed in IFIs in Bahrain. Findings The capacity to provide real-time reporting within the metaverse would enhance the quality and reliability of Islamic financial reporting. Furthermore, the fluctuating values of digital assets in the metaverse pose a significant challenge to ensuring accurate financial reporting. IFIs fail to create an environment suitable for transitioning to the metaverse. Moreover, the participants expressed concerns about how the rapid expansion of the metaverse may challenge the adherence to Shariah governance principles in virtual financial transactions. They further recommended that the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) establish explicit directives on Shariah governance in the metaverse. Practical implications Various IFIs’ stakeholders, including practitioners, shareholders and employees interested in adopting the metaverse technology, can benefit from the findings of the studies. In addition, the study could help Islamic banks in Bahrain better grasp the readiness and adaptability of accounting professionals. This understanding would aid in establishing robust financial reporting standards that align with Shariah principles in the metaverse. Originality/value This research examines the metaverse through the lens of Islamic financial reporting, offering recent evidence on technological developments and financial reporting practices within an Islamic context. The research findings would contribute to advancing the knowledge among academics, professionals and all interested parties concerning the effects of metaverse implementation on Shariah governance principles and the quality of financial reporting. The study findings would offer policymakers and regulators in the Islamic finance sector essential insights.

The effect of external Shariah audit on the performance of Islamic banking: evidence from Bahrain and Oman

Purpose This paper aims to examine the effect of external Sharia audit on the performance of Islamic banks in Bahrain and Oman, which are countries that implement it. This study aims to explore the role of external Sharia audit in preventing prohibited profits and mitigating the risks of noncompliance with Sharia principles. Design/methodology/approach This paper opted a quantitative approach and collected data from the employees of the Sharia Supervision Board & Sharia Audit in the Islamic banks. This paper studied how external Sharia audit affects the financial profitability and compliance with Islamic Sharia principles of Islamic banks, using partial least squares structural equation modeling technique. Findings The results indicated that external Sharia audit had a significant positive effect on both financial profitability and compliance with Islamic Sharia principles in the Islamic banks under study. This means that external Sharia audit enhances the financial performance and the adherence to Islamic Sharia principles of the Islamic banks. Research limitations/implications This study has some limitations that suggest directions for future research, such as expanding the sample to other countries and measuring more performance indicators for Islamic banks. Practical implications This study suggests that external Sharia audit enhances the performance and compliance of Islamic banks and urges the regulators to adopt it and standardize it. Originality/value This study contributes to the literature on Islamic finance and external Sharia audit by providing empirical evidence on the impact of external Sharia audit on the performance of Islamic banks.

Gauging the impact of Covid 19 on the Islamic banking System: A comparison of the financial performance of Islamic Banks in Bahrain during pre and post-Covid-19 Era

Gauging the impact of Covid 19 on the Islamic banking System: A comparison of the financial performance of Islamic Banks in Bahrain during pre and post-Covid-19 Era

Does the Board Influence the Bank’s Performance? An Islamic & Commercial Banking Experience

Purpose: This study investigates to explore the impact of corporate governance and the performance of the banking Industry of Bahrain for the period of 2012–2020. Theoretical framework: This research is to take a look at corporate governance actions and how it affects the actual bank performance, there are four chosen banks for this particular purpose that are listed under the Stock exchange of Bahrain (SEB) and the Central bank of Bahrain (CBB). Design/methodology/approach: The methodology for the study is based on pooled data collection from Islamic and commercial banks of Bahrain. All the data will be extracted from the chosen banks’ audited annual financial statements for 9 years ranging from 2012 to 2020. To go ahead with this research two kinds of dependent variables also called performance measures are (ROA, and ROE), and six kinds of independent variables were selected (CEO duality, the board size, board independence, female directorship, number of BOD meetings, and lastly board members expertise) for us to understand the bank performance better. Findings: The results showed good connections between the (BS) and bank performance as well as the (NBDM), while the (BDI) and (FD) displayed a negative link, and (BDME) and (CEOD) showed no signs of a relationship because all banks had separate people holding those positions instead of one. And even though (BDME) is proven and is logically impactful some analyses failed to show the true linkage. Research, Practical & Social implications: These results of the study will help the banking industry, regulators, investors, and government to understand the board’s influence on the firm performance. Originality/value: Original Research Article.

Can Islamic banks be sustainable with a simultaneously strong conventional banking counterpart - A comparative study of the financial performance of Islamic and conventional banks in Bahrain

Can Islamic banks be sustainable with a simultaneously strong conventional banking counterpart - A comparative study of the financial performance of Islamic and conventional banks in Bahrain

The impact of banking integration on the profitability of Islamic banks - Case study of Al Salam Bank of Bahrain and Emirates Islamic Bank -

The global banking arena witnessed many mergers, such as Islamic banks, which witnessed few of them. One of the most important objectives of the merger is maximizing profits, especially if Islamic banks are considered as profit-oriented banking institutions in addition to their economic, social and developmental functions. A statistical indication of the integration of the profitability of Al Salam Bank of Bahrain and Emirates Islamic Bank.

Determinants of bank lending rates: Empirical evidence from conventional retail banks in Bahrain

The study attempts to identify the determinants of lending rates in the Kingdom of Bahrain. It examines the impact of certain macroeconomic and banks’ aggregate data variables on the level of interest rates on loans charged by Bahraini conventional retail banks using quarterly data for the period from the 4th quarter of 2012 to the 4th quarter of 2021. The study tests the impact of a consumer price index (CPI), GDP growth rates, loan-to-total assets (loan ratio), liquid assets as a proportion of total assets (liquidity position), personal lending rate, loan-to-deposit ratio, money supply (M2) growth, non-performing loans (NPL) ratio, and return on assets (ROA) on banks’ lending rates. The study is mainly based on data retrieved from the publications of the Central Bank of Bahrain and the CEIC Data Global Database. The study uses EViews 12 The results reveal that CPI, liquidity position, the lending rate for personal loans, deposit ratio, and return on assets are the major determinants of bank lending rates to businesses. The study found that GDP growth, money supply growth, and non-performing loans ratio are insignificant in determining the lending rate to businesses in Bahrain. In addition to yielding insights to the respective authorities, this study also helps creditors, investors, and borrowers predict interest rates and thus manage their assets and liabilities more efficiently.

Shari’a Governance in Bahrain: Analysing the Islamic Banking Industry’s Implementation of the Newly Issued Regulatory Shari’a Governance Module

Shari’a governance is considered a crucial element of the Islamic banking industry. As recent as 2017, Islamic banks in the Kingdom of Bahrain were required by the regulator to have only a Shari’a Supervisory Board and an internal Shari’a function. In 2017, the Central Bank of Bahrain issued a new Shari’a Governance module (SG) in its rulebook, requiring all Islamic banks to have at least two internal Shari’a departments instead of one, mandated external Shari’a auditing, and maintaining the necessity of having a Shari’a Supervisory Board. In this study, through an empirical enquiry, we analyse how the Islamic banking industry implemented this new module. The empirical results revealed that there seems to be an implementation gap between Islamic retail and wholesale banks, where the former have fully implemented the new Shari’a governance requirements, while the latter were given exemptions to postpone its implementation.

Development and Evaluation of a Cloud Computing Adoption Framework (CCAFF) for Retail Banks in Bahrain

The Information Technology era supports the adoption of Cloud Computing (CC) on a large scale in many business fields, at which the Financial Institutions (i.e., Banking sector) is not an exception. Several gaps were found during an attempted literature reviewing. While several CC methods, strategies, or frameworks have been proposed or utilized for CC adoption in many economic sectors including the Financial institutes (FI)- Banking, it is still a relatively new initiative in many other countries including Bahrain. While Enterprise Architecture (EA) is claimed to be a leading information and business management discipline to develop an architecture that guides the transformation to CC adoption of an enterprise from a baseline state to a target state. However, there is an evident lack of scholarly articles on the development of CC adoption frameworks from EA perspective. Also, it was found that scholarly articles in the evaluation of CC adoption framework are scarce. To address those gaps, this paper aims at developing and evaluating a CCAFF for the CC adoption in Bahraini Banks by adapting a tailored version of the Open Group Architecture Framework (TOGAF) and embedding a tailored version of an enterprise cloud adoption strategy (ECAS) and then evaluating the CCAFF based on several criterions. A six phased Design Science Research Methodology (DSRM) is employed to design the research report, guide, and develop the CCAFF, while the exploratory nature of the research necessitates the employment of a holistic single Case Study strategy for an FI-01 bank, based on semi structured interviews and document analysis data collection techniques. Alongside, the data was analyzed using pattern matching technique. For the CCAFF evaluation, Delphi technique was employed at which seven experts in two rounded panels contribute to the evaluation findings based on six criterions. The evaluation findings demonstrated promising results in terms of ease of use (86.4%), usefulness (84.6%), decision making support (86.6%), comprehensiveness (85.8%), time efficiency (84.8%), and usage intention (84.8%).

The Impact of Covid-19 Pandemic on the Organisational Profitability of the Banking Sector in the Kingdom of Bahrain

This study aimed to determine the impact of the Coronavirus on the profitability of banks in the Kingdom of Bahrain - a case study on the NationalBank of Bahrain, Bank of Bahrain and Kuwait, and the Ahli United Bank, and an attempt to come up with recommendations. The study will beadministered by collecting data from the annual reports of the banks, as the population and sample of the study consist of NBB, BBK, and AUB Banks.The study lies in knowing the effects of Corona on the profitability of NBB, BBK and AUB banks in Bahrain by comparing previous annual reportsand analyzing the profitability ratio of banks before the Corona period and during the Corona period. The result of study shows that the Corona virusnegatively affects the profitability of banks in the Kingdom of Bahrain. The study notices through the results the extent of the impact of the Coronavirus on the profitability of banks through the sudden closure, and thus we see the extent of the banks' failure to achieve profitability through the markeddecrease in the rate of returns. Hence, the study recommends that in order for banks to increase their profitability, they must increase the effectivenessof the required reserve as a tool to control bank risks, and work on controls and determinants such as capital adequacy, legal liquidity ratio and the ratioof loans to deposits, which are much more effective than reserve requirements in maintaining the safety of the sector and its durability and its ability toabsorb shocks.

Conformity of Islamic Banks with AAOIFI Standards for General Presentation and Disclosure in Turkey and Bahrain

Islamic (participation) banks in Turkey are required to apply international accounting standards in their accounting and reporting practices, while their counterparts in Bahrain apply the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards. The main objective of this paper is to reveal the relation between Islamic and international accounting standards, discussed in previous studies, by comparing the compliance to AAOIFI accounting standards by Islamic banks in both Turkey and Bahrain. The source of information in this study is secondary data provided in the annual reports of the Islamic banks in Turkey and Bahrain for the year 2017. In order to measure compliance, an unweighted disclosure index was used. The outcomes of this study show that, since AAOIFI accounting standards are compulsory in Bahrain, the level of compliance with AAOIFI standards in relation to general presentation and disclosure in the financial statements of Islamic banks in Turkey is lower than the compliance achieved by their counterparts in Bahrain. Due to the average compliance level achieved by Islamic banks (using the unweighted disclosure index) in Turkey (54.6%), and since all banks in Turkey apply international financial reporting standards and international accounting standards, it is found that there is a relation between AAOIFI and International Accounting Standards Board standards even though they are different. Surprisingly, in the case of Bahrain’s Islamic banks, the standard deviation of the total compliance score is 8.66, which indicates an important difference among the Islamic banks in Bahrain in this regard. It is also found that the current practices of participation banks in Turkey do not adequately meet the financial statements and disclosure standards in accordance with the AAOIFI.

The Impact of Empowerment on Organizational Commitment: The Case of Islamic banks in Bahrain

The Impact of Empowerment on Organizational Commitment: The Case of Islamic banks in Bahrain

Do Financial Indicators Affect the ‎Performance of the ‎Banking Ecosystem of Bahrain? A Study of Covid-19 ‎Unprecedented

The main objective of this study is to address the growth of the banking system in Bahrain and analyze the impact of Covid-19 on its financial performance due to the global pandemic effect. The sample has been taken from the banking sectors of Bahrain, which include three clusters: Islamic banking, conventional banking, and entire banks. Data were collected from the Central Bank of Bahrain (CBB), with quarterly data extracted from 2019-2020. This paper measures the impact of pre- and post-Covid-19 financial performance of Bahraini banks to determine the factors affecting the financial indicators that influence the banking sectors of Bahraini banks. The outcomes of the t-statistic failed to reject the null hypothesis, indicating no significant difference between the pre- and post-financial performance of the complete banking sectors of Bahrain. Furthermore, the study diagnoses the factors analysis, including capital adequacy, asset quality, profitability, and liquidity of the banking system of Bahrain. Islamic banking maintained a strong financial position in the pre- and post-Covid-19 periods, along with capital adequacy, asset quality, and profitability. It was observed that pre-Covid-19 conventional banks performed below par in terms of capital adequacy, asset quality, and liquidity, but post-Covid-19, the profitability ratio improved. The entire banking sector, before Covid-19, worked under pressure to generate profit, but after the coronavirus crisis, it recorded profits due to timely actions taken by the Government of Bahrain to reduce the adverse impact of Covid-19. This is a time of survival and growth for the banking industry during uncertainty, aiming to facilitate knowledge-driven insights for financial success.

Value- based Islamic banking and reporting in Bahrain

PurposeThis paper aims to analyse whether the practices of Islamic banks in Bahrain are in line with value-based Islamic banking (VBIB) and reporting disclosure in the annual reports towards achieving their fundamental objectives of human-centred economic development and social justice.Design/methodology/approachBased on Islamic finance, Islamic economic principles and perception of Maqasid al-Shari’ah, this paper examines and assesses the current practices of Islamic financial institutions (IFIs) in Bahrain through content analysis of financial and annual reports of Islamic banks in Bahrain and interviews of Islamic banking experts.FindingsThe findings reveal that value-based banking (VBB) has not been translated fully into practice by the Islamic banks in Bahrain.Research limitations/implicationsThe data analysis was restricted to Islamic banks in Bahrain.Practical implicationsThis paper identifies the need for reporting standard development to improve the VBB practice in Bahrain in the future. Looking at the objectives of the IFIs, this paper introduces the concept of VBB in Bahrain, which includes ethical banking, responsible banking and social responsibility. The study adds value not only to the current Islamic finance literature but also helps many stakeholders, including prospective academics, who may conduct comparative studies in different jurisdictions throughout the world.Originality/valueThe specific contribution of this paper is the identification of the VBB practices and related disclosure in the Islamic banking industry in Bahrain. The study is useful to harmonise and standardise the practices of VBIB by the contemporary Islamic banks in Bahrain.

Gender inequality barriers and solutions to senior management positions: perspectives on women in Bahraini banking sector

ABSTRACT This paper mainly aims at investigating the barriers that female Bahraini managers face in their career progression when attempting to reach senior management positions. In addition, this paper seeks to propose practical solutions to overcome the Barriers in women's career progression. To achieve the objectives of the study, qualitative research approach was applied through semi-structured interviews specifically designed to collect primary information from the samples of the study, which consisted of (40) managers (female) working in banks in Bahrain and financial sector. The results showed that autonomy and acquiescence to the norms are the main barriers that female Bahraini managers face in their career progression when attempting to reach senior management positions. As well as, the results illustrated that competence, customs, and self- improvement are practical solutions to overcome the Barriers facing women in career progression.

Cash Waqf Linked Sukuk (CWLS) Model: For Indonesia Sustainable Food Security

This study aims to build an integrated model between Islamic social finance, government sukuk financing and Indonesian food security. This study proposes an integrated model between Islamic social finance and government sukuk to build community food security through the cash waqf linked sukuk model. This model based on a modification of Sukuk issued by The Central Bank of Bahrain to provide a commodity in the future. The model proposed in this study is an innovative productive waqf model. The management involves both government and private companies. Sukuk are issued by the government through the ministry of finance or Bank Indonesia. Sukuk issued in social purposes with the underlying transaction is an innovative productive waqf. After the sukuk is issued, the funds are collected by means of a waqf contract, through cash waqf and assets. The funds or assets collected are submitted to the operational manager. The operational manager provides sukuk funds to farmers as capital for carrying out agricultural, plantation and livestock activities. Products that are prioritized are the primary needs of the community, including agricultural products of superior quality from biotechnology research, superior quality vegetables from biotechnology research in the field of plantations, livestock products from research field. The harvest is sold through the ministry of agriculture or through the traditional market to support the availability of food in sufficient quantities in a minimum price. The preferred products are the products of the primary needs of the community.

HRM practices and Sustainable Competitive Advantage Evidence in National Bank of Bahrain

The main purpose of this paper is to investigate how the HRM practices create a competitive advantage in the National Bank of Bahrain as a case study, from the perspective of the workers on the Bank. Thus data were collected from a randomly sampled respondent consist of 168 managerial employees of nine sub-bank locals in Bahrain through using a well-structured questionnaire, and validity and reliability to a questionnaire have been tested. descriptive and analytical methods were used, in addition, the Pearson correlation coefficient and simple linear regression test and Unilateral variation analysis (ANOVA). A key question measured in this research to explore how HRM practices which identified in five main factors (as planning and Job Analysis, and Recruitment and Selection, training and development, and Compensation (Pay and Benefits) seek to gain competitive advantage. The findings showed that there is a statistically significant effect of the dimensions of human resources management practices on achieving considerable a competitive advantage in the National Bank of Bahrain

Agility and Fintech is the Future of Islamic Finance: A Study from Islamic Banks in Bahrain

Fintech is the new revolution in finance and banking industry. Artificial intelligence, robotics, blockchain and other advanced technologies have slowly found space in the banking world. Islamic banking is not untouched by these revolutions. Bahrain is considered as the hub of Islamic banking in the GCC and all over the world. Bahrain has the largest concentration of Islamic banks in the world. The main objective of this study is to find the impact of agility and fintech on the future of Islamic banking in Bahrain. The research has used mainly secondary data for its study. The study concludes that the fintech has potential impact on the future of Islamic banking. There was a reluctant on the part of Islamic banks to adopt fintech. They treated fintech as more of a competitor than the partners. The Islamic banks now must understand to be agile, competitive and aggressive. The study indicated many points which highlights the necessity on the part of Islamic banks to be agile and adopt fintech as partners.

Development of Effective Internal Shariah Audit Framework using Islamic Agency Theory

The objective of this paper is to analyze the development of an effective internal Shariah audit framework for Islamic banks in Bahrain using Islamic agency theory. The questionnaire method and Islamic agency theory were used to examine the independence and effectiveness of internal Shariah audits. The insights from the study are gained through the Islamic agency theory, which has a direct relationship with the degrees of independence and effectiveness. The findings indicate that a well-founded Islamic agency theory could potentially be used as the theoretical foundation in building a conceptual, multifaceted framework. This research fills a gap in terms of the level of development for an effective internal Shariah audit framework in Islamic banks using Islamic agency theory.

Do employability skills for business graduates meet the employers’ expectations? The case of retail Islamic banks of Bahrain

PurposeManagers claim that fresh graduates are unequipped to meet market demands. The aim of this study is to investigate the perception of employers in retail Islamic banks of Bahrain on newly graduated business students. The Singaporean Model of Employability Skills was implemented, to ascertain the mean ratings of employability skills in terms of their importance and the competency of business graduates.Design/methodology/approachThis deductive research approach initiated with a literature review that identifies research gap and a model that was tested via a self-administration adopted survey by collected data from 220 senior employees at retail Islamic banks of BahrainFindingsThe systematic of convenience sampling technique was used in selecting 161 samples and the researcher received only 85 completed questionnaire forms. Findings initiate that employers appreciated the importance of teamwork, risk management and decision-making skills. Their main recommendation was that employers should establish a durable bond with universities to enhance employability skills.Originality/valueBecause the researcher gathered all data from employers of different Islamic banks in Bahrain, this sector in addition will get the advantage of the results that banks will formulate their strategic plans accordingly to tackle the business graduates’ weaknesses. Likewise, universities and researchers might be motivated to look into new innovative methods that assist graduates to accommodate with market conditions.