The Effects of Risk Management Practices on Financial Performance: An Empirical Analysis on Islamic Banks

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...

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Main Authors: Mine Işık, Raif Parlakkaya, Gülşah Şen Küçük, Suna Akten Çürük
Format: Article
Language:English
Published: Selcuk University Press 2023-08-01
Series:Selçuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi
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Online Access:https://dergipark.org.tr/tr/download/article-file/2841881
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author Mine Işık
Raif Parlakkaya
Gülşah Şen Küçük
Suna Akten Çürük
author_facet Mine Işık
Raif Parlakkaya
Gülşah Şen Küçük
Suna Akten Çürük
author_sort Mine Işık
collection DOAJ
description 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.
format Article
id doaj-art-542f0524c7ce4d72b98fa13e5ee4df85
institution Kabale University
issn 2667-4750
language English
publishDate 2023-08-01
publisher Selcuk University Press
record_format Article
series Selçuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi
spelling doaj-art-542f0524c7ce4d72b98fa13e5ee4df852024-12-02T05:11:02ZengSelcuk University PressSelçuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi2667-47502023-08-0151183310.52642/susbed.1221549154The Effects of Risk Management Practices on Financial Performance: An Empirical Analysis on Islamic BanksMine Işık0Raif Parlakkaya1Gülşah Şen Küçük2Suna Akten Çürük3BAYBURT ÜNİVERSİTESİNECMETTİN ERBAKAN ÜNİVERSİTESİNECMETTİN ERBAKAN ÜNİVERSİTESİNECMETTİN ERBAKAN ÜNİVERSİTESİRisk 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.https://dergipark.org.tr/tr/download/article-file/2841881risk yönetimifinansal performansi̇slami bankalarpanel regresyon.risk managementfinancial performanceislamic bankspanel regression.risk yönetimifinansal performansi̇slami bankalarpanel regresyon.risk yönetimifinansal performansi̇slami bankalarpanel regresyon.
spellingShingle Mine Işık
Raif Parlakkaya
Gülşah Şen Küçük
Suna Akten Çürük
The Effects of Risk Management Practices on Financial Performance: An Empirical Analysis on Islamic Banks
Selçuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi
risk yönetimi
finansal performans
i̇slami bankalar
panel regresyon.
risk management
financial performance
islamic banks
panel regression.
risk yönetimi
finansal performans
i̇slami bankalar
panel regresyon.
risk yönetimi
finansal performans
i̇slami bankalar
panel regresyon.
title The Effects of Risk Management Practices on Financial Performance: An Empirical Analysis on Islamic Banks
title_full The Effects of Risk Management Practices on Financial Performance: An Empirical Analysis on Islamic Banks
title_fullStr The Effects of Risk Management Practices on Financial Performance: An Empirical Analysis on Islamic Banks
title_full_unstemmed The Effects of Risk Management Practices on Financial Performance: An Empirical Analysis on Islamic Banks
title_short The Effects of Risk Management Practices on Financial Performance: An Empirical Analysis on Islamic Banks
title_sort effects of risk management practices on financial performance an empirical analysis on islamic banks
topic risk yönetimi
finansal performans
i̇slami bankalar
panel regresyon.
risk management
financial performance
islamic banks
panel regression.
risk yönetimi
finansal performans
i̇slami bankalar
panel regresyon.
risk yönetimi
finansal performans
i̇slami bankalar
panel regresyon.
url https://dergipark.org.tr/tr/download/article-file/2841881
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