The Impact of Financing Revenues of the Banks on their Profitability: An Empirical Study on Local Jordanian Islamic banks

Abstract

The purpose of the study is to identify the impact of some financing revenues of Islamic banks operating in the Jordanian economy, represented in Murabaha (Cost plus), Mudaraba( Profit sharing) and Bai Ajil ( deferred sale), on the profitability of these banks during the period (2006-2014).

The study' s population consists of all local Islamic banks operating in the Jordanian economy while the sample of the study includes both the (Jordan Islamic Bank for Finance and Investment as well as the Islamic International Arab Bank). To achieve the goal of the study, the different statistics methods and  Multiple Linear Regression for Hypotheses testing has been used through the (E-views) program, the results of the study indicated to:

1. There is an impact of each of Murabaha, Mudaraba and Deferred Sale , all combined, on the profitability of the local Islamic banking sector in Jordan for the  years of the study, under examination and analysis.

2. There is an impact of  Murabaha,  solo, on the profitability of the local Jordanian Islamic banking sector during the years of the study under examination and analysis.

3. There is an impact of  Mudarabah, solo, on the profitability of the local Jordanian Islamic banking sector during the years of the study under examination and analysis.

4. There is an impact of  the Deferred Sale, solo, on the profitability of the local Jordanian Islamic banking sector during the years of the study under examination and analysis.

Keywords: Murabaha, Mudaraba, Deferred Sale, Jordan Islamic Banks.