Growth and Financial Performance of Islamic Banks in Nigeria: The Monetary Policy Impact
- December 11, 2020
- Posted by: RSIS Team
- Categories: Banking & Finance, IJRISS
International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue XII, December 2020 | ISSN 2454–6186
Growth and Financial Performance of Islamic Banks in Nigeria: The Monetary Policy Impact
Dr. Olalekan Akinrinola and Aruwa Isah Yusuf
Department of Finance, Caleb University, Imota, Lagos Nigeria
Abstract:- The study investigates the impact of monetary policy on the growth and financial performance of Islamic Banks using data spanning the periods 2014-2019 from 3 Islamic Banks in Nigeria (JaizBank Plc, Sterling Bank Plc and Stanbic IBTC Bank Plc i.e., operating full-fledge Islamic bank or Islamic Banking windows). The study employed the Robust Least Squares (RLS) and Panel Robust Least Squares (PRLS) methods to examine the specific Banks’ effect and the panel analysis. The results showed that on the specific Banks’, monetary policy significantly impacted on their growth and financial performances. However, considering the panel result, monetary policy impacted insignificantly on the Banks, which reflects the disparity in the strategic positions of the Banks. It concluded and recommended from the research findings that the in growth and financial planning of the Islamic banks in Nigeria, plans are put in place to mitigate the unstable monetary policy landscape, while also evaluating the possibility of a dual regulatory model which accommodates Islamic banking guidelines of profit or loss sharing
.
Keywords: Growth, Financial Performances, Islamic Banks, Monetary Policy.
1. Introduction
One of the strong pillars of the economy of countries is the banking sector(Akintan, Dabiri, & Sanyaolu, 2018). The banking plays a very important role by providing the mechanism for savings mobilization, influence the distribution of income and most importantly as a mechanism for implementing monetary policy through the various financing options that is coordinated by the monetary regulators in an economy. The financial role played by Banks is integral to the modern market economies. “…Well-functioning and sound financial institutions and markets underpin the smooth exchange of services and goods and foster long-term investment and thus growth…” (Beck, 2011).
