Abstract: Banks are financial intermediates between depositors and borrowers. The backbone of the economy for any country related directly to the economics performance of the banking sector which included Islamic banks and commercial banks that play a crucial role in any society. Dubai has emerged as a global city of the Gulf region and it is increasingly developing as a business hub for service industries such as IT and Finance. The Emirate's Western-style model of business drives its economy, and more than 90% of the main revenues currently coming from various aspects rather than financial services. Therefore analyzing the economical efficiency of this sector in Dubai is very important. Data Envelop Analysis (DEA) technique is one of the most famous tools to evaluate the efficiency of a set of Organizations or Decision Making Units, and it is an application of the mathematical programming optimization. DEA offers a variety of models that use multiple inputs and outputs to compare the efficiency of two or more entities.The economics efficiency and performance for any institution consists of two types of efficiencies; the technical efficiency that indicates the ability to gain the maximum production by the available inputs, and the locative efficiency that indicates the ability to use the best mix for inputs by considering prices and available production technology. In this article the DEA model will be applied for measuring the economical performance for commercial Banks versus Islamic Banks in Dubai. The considered financial indicators to analyze the economics performance are the Deposits and Cash & BCB (cash and balances in central bank) as inputs for the model in both Islamic and commercial Banks, while the investments and the Loans in commercial banks and Murabaha in Islamic banks (instead of loans in commercial banks) are considered as outputs.
Keywords: Islamic Banks, Commercial Banks, Data Envelop Analysis, economical performance, Deposits, Loans, Cash & BCB, and investments.
Title: Investigating Economical Performance for UAE Islamic Banks versus Commercial Banks
Author: Doaa Wafik, Assem Tharwat
International Journal of Interdisciplinary Research and Innovations
ISSN 2348-1218 (print), ISSN 2348-1226 (online)
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