The impact of zakat contribution on the financial performance of Islamic banks in Malaysia

Islamic banks in Malaysia are beginning to response to calls for financial services that are responsible in providing social development impacts to the nation. Malaysia’s value-based intermediation strategy, initiated by the Bank Negara Malaysia is expected to move the Islamic finance industry t...

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Main Authors:	Rosman, Romzie, Haron, Razali, Mohamed Othman, Nurul Balqis
Format:	Article
Language:	English English
Published:	IIUM Press, International Islamic University Malaysia 2019
Subjects:	HG3368 Islamic Banking and Finance
Online Access:	http://irep.iium.edu.my/75832/ http://irep.iium.edu.my/75832/ http://irep.iium.edu.my/75832/1/75832%20-The%20impact%20of%20zakat%20contribution%20on%20the%20financial%20performance.pdf http://irep.iium.edu.my/75832/7/75832%20-The%20impact%20of%20zakat%20contribution%20on%20the%20financial%20performance-%20scopus.pdf

id	iium-75832
recordtype	eprints
spelling	iium-758322020-02-10T04:23:57Z http://irep.iium.edu.my/75832/ The impact of zakat contribution on the financial performance of Islamic banks in Malaysia Rosman, Romzie Haron, Razali Mohamed Othman, Nurul Balqis HG3368 Islamic Banking and Finance Islamic banks in Malaysia are beginning to response to calls for financial services that are responsible in providing social development impacts to the nation. Malaysia’s value-based intermediation strategy, initiated by the Bank Negara Malaysia is expected to move the Islamic finance industry to the next level of sustainable and long term economic development. Islamic banks are expected to not only focus on profit but also on contribution to societies through Islamic social finance. The traditional methods of Islamic social finance especially on the contribution of zakāt, waqf and ṣadaqah have been used to provide for the basic means of livelihood for the poor. Not only that, this shows that Islamic banks do not only concern on making profits but making contribution to the societies by involving in Islamic social finance through corporate social responsibility. Specifically, this study examines the impact of corporate social responsibilities particularly on the application of Islamic social finance which is zakāt contribution by Islamic banks on their financial performances namely return on assets, return on equity and operating profit. This study focuses on Islamic banks in Malaysia from 2011 to 2018. The financial information is extracted from Fitch Connect and annual reports of the respective Islamic banks which include 15 Islamic banks in Malaysia. The panel regression method was adopted to explain the three models and examine the impact of Islamic social finance on the financial performances of Islamic banks. The findings show that zakāt contribution has positive significant impact on Islamic banks’ financial performance namely operating profit. Hence, the findings of this study offer policy implications by providing empirical evidence on the importance of Islamic social finance on the financial performance of Islamic banks. IIUM Press, International Islamic University Malaysia 2019-10-15 Article PeerReviewed application/pdf en http://irep.iium.edu.my/75832/1/75832%20-The%20impact%20of%20zakat%20contribution%20on%20the%20financial%20performance.pdf application/pdf en http://irep.iium.edu.my/75832/7/75832%20-The%20impact%20of%20zakat%20contribution%20on%20the%20financial%20performance-%20scopus.pdf Rosman, Romzie and Haron, Razali and Mohamed Othman, Nurul Balqis (2019) The impact of zakat contribution on the financial performance of Islamic banks in Malaysia. Al-Shajarah: Journal of The International Institute of Islamic Thought and Civilization (ISTAC), Special Issue: Islamic Banking and Finance. pp. 1-21. ISSN 1394-6870 https://journals.iium.edu.my/shajarah/index.php/shaj/article/view/901
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English
topic	HG3368 Islamic Banking and Finance
spellingShingle	HG3368 Islamic Banking and Finance Rosman, Romzie Haron, Razali Mohamed Othman, Nurul Balqis The impact of zakat contribution on the financial performance of Islamic banks in Malaysia
description	Islamic banks in Malaysia are beginning to response to calls for financial services that are responsible in providing social development impacts to the nation. Malaysia’s value-based intermediation strategy, initiated by the Bank Negara Malaysia is expected to move the Islamic finance industry to the next level of sustainable and long term economic development. Islamic banks are expected to not only focus on profit but also on contribution to societies through Islamic social finance. The traditional methods of Islamic social finance especially on the contribution of zakāt, waqf and ṣadaqah have been used to provide for the basic means of livelihood for the poor. Not only that, this shows that Islamic banks do not only concern on making profits but making contribution to the societies by involving in Islamic social finance through corporate social responsibility. Specifically, this study examines the impact of corporate social responsibilities particularly on the application of Islamic social finance which is zakāt contribution by Islamic banks on their financial performances namely return on assets, return on equity and operating profit. This study focuses on Islamic banks in Malaysia from 2011 to 2018. The financial information is extracted from Fitch Connect and annual reports of the respective Islamic banks which include 15 Islamic banks in Malaysia. The panel regression method was adopted to explain the three models and examine the impact of Islamic social finance on the financial performances of Islamic banks. The findings show that zakāt contribution has positive significant impact on Islamic banks’ financial performance namely operating profit. Hence, the findings of this study offer policy implications by providing empirical evidence on the importance of Islamic social finance on the financial performance of Islamic banks.
format	Article
author	Rosman, Romzie Haron, Razali Mohamed Othman, Nurul Balqis
author_facet	Rosman, Romzie Haron, Razali Mohamed Othman, Nurul Balqis
author_sort	Rosman, Romzie
title	The impact of zakat contribution on the financial performance of Islamic banks in Malaysia
title_short	The impact of zakat contribution on the financial performance of Islamic banks in Malaysia
title_full	The impact of zakat contribution on the financial performance of Islamic banks in Malaysia
title_fullStr	The impact of zakat contribution on the financial performance of Islamic banks in Malaysia
title_full_unstemmed	The impact of zakat contribution on the financial performance of Islamic banks in Malaysia
title_sort	impact of zakat contribution on the financial performance of islamic banks in malaysia
publisher	IIUM Press, International Islamic University Malaysia
publishDate	2019
url	http://irep.iium.edu.my/75832/ http://irep.iium.edu.my/75832/ http://irep.iium.edu.my/75832/1/75832%20-The%20impact%20of%20zakat%20contribution%20on%20the%20financial%20performance.pdf http://irep.iium.edu.my/75832/7/75832%20-The%20impact%20of%20zakat%20contribution%20on%20the%20financial%20performance-%20scopus.pdf
first_indexed	2023-09-18T21:47:15Z
last_indexed	2023-09-18T21:47:15Z
_version_	1777413532427485184

The impact of zakat contribution on the financial performance of Islamic banks in Malaysia

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