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- Title
The Effects of Risk Management Practices on Financial Performance: An Empirical Analysis on Islamic Banks.
- Authors
AKTEN ÇÜRÜK, Suna; ŞEN KÜÇÜK, Gülşah; IŞIK, Mine; PARLAKKAYA, Raif
- Abstract
Risk is an inevitable reality for financial institutions, and once it is known, the main activity to be done is an effective risk management. The purpose of this study is to empirically analyze the effects of risk management practices on financial performance in Islamic banks. This study examines the effect of risk management practices on the financial performances of three Islamic banks operating in Türkiye through regression analysis. The data set of the study consists of a panel data containing 180 observations in total. Return on equity and return on assets, which are used as indicators of banks' financial performance, are dependent variables of the model. The financial ratios used to represent risk management are the independent variables of the model. The findings reveal that leverage ratio and asset utilization ratio have statistically significant effects on the performance of Islamic banks. The results of the study support the findings and arguments in the established body of previous literature. The findings obtained within the scope of this study could be used as guidance for the banks in their financial risk management practices and they will shed light on the future studies.
- Subjects
ISLAMIC finance; FINANCIAL risk management; FINANCIAL performance; RATE of return; FINANCIAL ratios
- Publication
Selcuk University Social Sciences Institute Journal, 2023, Issue 51, p18
- ISSN
1302-1796
- Publication type
Article
- DOI
10.52642/susbed.1221549