Abstract
The objective of this study is to identify and analyze the
trend of different modes of financing offered by standalone Islamic
banks and Islamic subsidiaries of conventional banks of Malaysia.
At present, there are 5 standalone Islamic banks and 11 Islamic
subsidiaries of conventional banks operating in Malaysia. All banks
are selected for analysis. Annual audited financial statements of
standalone Islamic banks and Islamic subsidiaries of conventional
banks have been utilized for obtaining data. The study period is
from year 2010 to 2016. Vertical and horizontal analysis techniques
are applied for analyzing the data. The results indicate that Islamic
subsidiaries of conventional banks are more efficient in providing
different modes of financing out of 6 popular modes; Islamic
subsidiaries of conventional banks are capturing 4 modes which
are in double figure as percentage of the total portfolio; while in
standalone Islamic banks, 3 modes are in double figure. In sales
base products standalone Islamic banks are more efficient, while
Islamic subsidiaries of conventional banks are more efficient in
providing rental base products. In products like mur¯abah. ah and
ij¯arah, Islamic subsidiaries of conventional banks are more efficient,
while standalone Islamic banks are more efficiently managing the
controversial products such as Bai Bithaman Ajil and tawarruq.
While three products are showing upward trends, the other three are
showing downward trend. The study concluded that despite being
exalted in Islamic banking and finance, still the Islamic financing
base of Malaysian banks comprises the debt creating modes.
Muhammad Hussain Qureshi, Talat Hussain. (2020) Trend Analysis of Islamic Financing: A Case of Islamic Banks in Malaysia, Journal of Islamic Business and Management, Volume 10, Issue 1.
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