Browsing by Author "Dr. Waheed Akhter"

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Diversification and Stability of Financial Performance in Banking Industry: A Panel Data Investigation
(Library Information Services, COMSATS University Islamabad, Lahore Campus, 2022) Rabia Asif; FA12-PMS-006; Dr. Waheed Akhter; LHR TP 7750
The present study attempts to assess the impact of three important dimensions of diversification (income, product and geographic) on banks’ financial stability using panel data of 184 banks from 11 Islamic countries namely Bahrain, Kuwait, Indonesia, Malaysia, Oman, Pakistan, Qatar, Saudi Arabia, Turkey, UAE and Yemen for the period from 2006 to 2017. The study has also taken into consideration the moderating role of bank size and contagion risk in shaping diversification-stability nexus, which is considered relatively ignored research area in corporate finance literature. This study adopts a two-step analysis to examine the impact of diversification on the banking sector’s financial stability. First, a novel Financial Stability Index is constructed and put into the analysis along with traditional stability indicator of Z-Score. Then, the study uses the Herfindahl Hirschman Index as a proxy for diversification to explore the influence of income, product and geographical diversity on banks’ financial stability. Secondly, the study uses the system GMM framework and finds that income diversification plays a significant role in enhancing banking financial stability. While, geographical diversification within the home country enhances financial stability by providing risk reduction benefits. Further, pure Islamic banks are found to be more financially sound than pure conventional banks. In addition, the role of geographical diversification and income diversification on stability helps in understanding the networks through which income and geographical diversification can help deepen the financial systems. Further, bank size and contagion risk plays a significant moderating role in shaping the linkage between bank diversification and financial stability showing that benefits from diversification are dependent on bank size and reduced in the presence of contagion risk. The study contributes to the enduring debate on the inclusion of different non-financial services into banking portfolios with a view to enhancing their resilience to losses as well as bankruptcy risk. These results have important policy implications for banking regulators to enhance financial stability through bank diversification strategies.
Impact of Corporate Governance on Firm’s Performance During the COVID-19 Pandemic: Evidence from Islamic and Conventional Firms
(Library Information Services, COMSATS University Islamabad, Lahore Campus, 2023) Naeem Iqbal; FA19-RMS-018; Dr. Waheed Akhter
Purpose – The present research aims to determine the impact of Corporate Governance most significant attribute board diversity on firm’s performance in the context of Islamic and Conventional non-financial firms in Pakistan in Pre and during Covid-19 period. Design/methodology/approach – The analysis are made using the 130 non-financial firms comprises of 51 Islamic firms listed in the KMI-30 and KMI all shares index, and 79 conventional firms listed in the Pakistan Stock Exchange across various indexes over the period of 2011-2020 utilizes the OLS and panel fixed effect estimation technique for analysis. The robustness of findings is checked through alternative estimation techniques. Findings – The results show that in Islamic firms, board tenure diversity positively while board gender diversity has negative impact on performance. In conventional firms, board education and tenure diversity positively impact performance, while board age diversity has a negative impact. In Pre-Covid-19, board tenure diversity positively while age is negatively affected performance in Islamic firms. During Covid-19, board education diversity positively influenced Islamic firm performance. In Pre and during-Covid-19, board tenure diversity positively affected performance in conventional firms. During Covid-19 only gender diversity negatively affected performance in conventional firms. Other diversity indicators are insignificant in both Islamic and Conventional firms. Research limitations/implications – This study is conducted in the context of Pakistani Islamic and Conventional firms; thus, the study's findings on board diversity in Pakistani Islamic and conventional non-financial firms may not apply universally. Generalizing these findings should be approached cautiously due to distinct institutional and governance frameworks across economies. Practical implications – To enhance firms' competitive performance, policymakers should promote the incorporation of board members with diverse tenures and educational backgrounds in Conventional firms while diverse tenures in Islamic firms that align with the organization's needs. By adopting the education and tenure wise diverse board structure, firms can attract a wide range of stakeholders and effectively meet their expectations, thereby improving overall firm performance. x Originality/value – To the best of the authors’ knowledge, this is the first study that investigates the impact of board diversity on firm accounting-based performance and market-based performance in the context of Islamic and Conventional firms in Pakistan. This study uses RBV theory to provide a unique corporate governance structure based on board diversity, particularly in Pakistan.
Impact of Corporate Governance on Risk Management and Financial Performance: Evidence from SAARC Region
(Library Information Services, COMSATS University Islamabad, Lahore Campus, 2023) Noreena Ilyas; FA19-RMS-019; Dr. Waheed Akhter
The importance of corporate governance has grown in South Asian countries due to the rising demand for cash and other financial resources from businesses. A risk management committee may be formed, and bank performance can be sustained through good corporate governance, administering an organization following the laws and regulations. This study aims to explore the relationship between corporate governance, risk management, and financial efficiency in both Islamic and traditional banks. With the growing interest in the financial performance of banks, it is important to understand the impact of these factors on the overall efficiency of banks. The study analyzed the influence of corporate governance and risk management on the performance of both Islamic and conventional banks, taking into account bank size as control variable. Good corporate governance practices can improve the risk management of banks and enhance their overall financial performance. Risk management is another important factor that affects the financial performance of banks. Effective risk management practices help banks to identify, assess, and manage potential risks that can impact their financial performance. This study will provide the deep insight of the impact of corporate governance and risk management on the financial performance of banks in SAARC region by taking the data of Islamic and conventional banks from seven countries. Fixed effect regression analysis will be used to find the results. Finally, the study provides recommendations for regulators and policy makers on ways to improve the financial efficiency of banks by increasing their size and internal governance. The findings of the study will be useful for policymakers, regulators, and banks in developing strategies to improve the financial performance of banks, and to promote the stability and prosperity of the banking sector
Role of Islamic banking in Financial Inclusion; A Regional Analysis
(Library Information Services, COMSATS University Islamabad, Lahore Campus, 2016) Muhammad Umer Majeed; FA12-MSMS-014; Dr. Waheed Akhter; LHR TP 4367
Financial inclusion is emerging topic in these days. This study investigates that how Islamic banking affecting financial Inclusion. This study also identifies the role of control variable how they are playing their role for enhancing the financial inclusion. Islamic banking which provide Riba free services playing its role especially in Muslims Countries so it is important to promote Islamic banking so we can increase financial inclusion. This study used panel of 28 countries which were selected from OIC countries where Islamic banking prevail further we subdivided countries on basis of 2 regions Asia and Africa in which 14 are situated in Asia and rest in Africa, over the period 2005-2014. Results are estimated by application of Fixed and Random Effect Panel Regression technique suggested by the Hausman test. Results confirm that Islamic banking is more contributing in borrow side with respect to other dimensions of financial inclusion Depositors and Branches. Results shows that in both region Asia and Africa GDP is positively and significantly impacting on financial inclusion. And there is need to develop more confidence among people to improve financial inclusion for both region. Result also show that people feel hesitation to deposits in banks. At branches side lerner index show positive and significant impact which tells that as banking competition increase then more branches opens so that financial access will increase
The Holy Day Effect and Stock Performance: Evidence from Asian and African Markets
(Library Information Services COMSATS University Islamabad Lahore Campus, 2016-02-03) IRFAN ALI; FA13-MSMS-024; Dr. Waheed Akhter; LHR TP 4370
Religion play an important role in people’s lives but its impact on stock markets is rarely investigated. Past literature of calendar anomalies mostly established on the Gregorian calendar such as day of the week, turn of the year and holiday effects etc. However, Islamic calendar anomalies are hardly investigated in finance literature. To explore this issue, this study examines the impact of Muslim’s Holy Days (Ashura, Eid Melad-un-Nabi (SAW), Ramadan, Eid-ul-Fitr and Eid-ul-Adha) on daily stock returns of Asian and African Muslim financial markets for a period of 2001 to 2014. Muslim Holy Days are helpful to isolating the effect of faith and decoupling it from possible contaminants. This study has tried to isolate the impact of Muslim Holy days from Gregorian calendar anomalies. First, we check the impact of Holy days on stock returns of Asian and African markets together, then the impact of stock returns of Asian and African markets separately. We divide our data into two sub groups i.e. on the basis of income and population. On the basis of income, we check the impact of Holy days on stock returns of high income, upper middle income and lower income markets separately. Similarly on the basis of population, the impact of Holy days on stock return of high populated and less populated markets. Pooled fixed/variable effect regression is used to investigate the impact of Muslim Holy days on stock return. Hausman test is used to check, which effect either fixed or random is suitable for our data. The study found that Muslim Holy days are effecting stock returns of under study markets differently. This effect of Muslim Holy days on stock returns is not unidirectional as Ramadan, Eid-ul-Fitr and Eid-ul-Adha yield a positive impact on stock return, while Ashoura and Eid Melad-un-Nabi (SAW) are associated with negative one. These findings strengthen our argument that the documented effect is a result of Muslim Holy days, not due to Gregorian calendar anomalies. This study also opposed to traditional financial philosophy (EMH) that distribution of stock return should remain same across all trading days of the year (Fama, 1970, Jaffe, Rozeff & Kinney, 1976 & Westerfield, 1985). Even by isolating and controlling the effect of Muslim Holy days from Gregorian calendar anomalies, the Gregorian calendar effect still exist in all under studies markets. On the basis of these findings, we suggest that investors can formulate investment strategy and select a trading time in order to outperform the market.