Monzer Kahfmanagerial levels, especially the middle-level and the way the bank and its
employees treat their clients. It is apparent that this bank is able to attract and
hold on to its clients, and it knows how to sell itself to potential customers.
This is one of the key factors of success. We should however not disregard
the monopolistic position enjoyed by the bank in the local market of Islamic
services and the fact that it’s been well entrenched, as an older Islamic bank,
in the international market.
Here, we should note that the least lucky of the five remaining banks in
keeping its investments in accord with its assets is bank D, which experienced
persistent drop in both its total assets and invested assets in the last two
years. Perhaps part of the reason is that the bank was unable to achieve a high
rate of investment in 1999, which made investors turn away from it in the
next two years. If the gross margin between its assets and investments was
big in 1999, it was equally big in 2001. Next is bank E whose investment
index dropped by 5 points. As for the 3 other Islamic banks, they share with
these two banks a disparity between the growth in assets as a whole and the
growth in invested assets, but to a lesser extent. This has serious significance
on the level of training and technical qualification in the investment
managements and the ability of the management to reach out to businessmen
and to attract them to use the bank’s services. This phenomenon also casts a
shadow on the management method of taking investment decisions and on
the accuracy and speed of information fed to the management so as to enable
it to make decisions with the appropriate speed and efficiency.
Tables 1 and 2 did not touch on the index of invested assets to total
assets. This ratio is undoubtedly influenced by the central bank’s monetary
policy, the bank’s investment approach, its patterns of waiting for
opportunities and its adopted limits of banking soundness. The Jordanian
central bank for example is known to tend towards extreme conservatism in
this regard. Nevertheless Table 3 has important significance: it does not only
outline the ratio of investment to total assets, but it also points to the bank’s
efforts in using its available assets and the changes of these efforts from time
to time.
Table 3: Percentage of Invested Assets/Total Assets
BANK 1998 1999 2000 2001 Average 98/99 99/00 00/01 98/01
A 68.41 65.02 68.06 67.42 67.22 -4.95 4.67 -0.94 -1.45
B 94.81 95.27 94.35 93.82 94.56 0.49 -0.96 -0.56 -1.04
C 84.88 89.88 89.64 88.40 88.20 5.89 -0.27 -1.38 4.15
D 97.09 93.72 90.92 92.43 93.54 -3.47 -2.98 1.66 -4.79
E 88.64 85.81 88.17 84.95 86.89 -3.19 2.75 -3.66 -4.16
F --- 83.51 86.05 83.17 84.24 --- 3.04 -3.35 -0.41
G 89.96 89.70 90.36 93.37 67.51 -0.29 0.74 3.33 3.79
Average 87.30 86.13 86.79 86.22 83.17 -0.92 1.00 -0.70 -0.56