Success Factors of Islamic Banks: An Empirical StudyIt is important to bring in Table 8, despite its scanty information, because
it points out a significant success factor of Islamic banks; that is the role of
deposits in special and restricted accounts, as a factor of a substantial
influence both positively and negatively. Whenever a bank is able to increase
deposits in these accounts, its profitability rises, even with a weaker growth in
its unrestricted deposits; and a failure to promote these ff-balance sheet
deposits always reflects negatively on all components of total deposits.
Table 8: Percentage Growth of Restricted and Special Investments
BANK 1998/99 1999/2000 2000/2001 1998/2001 Average
A 51.91 70.77 16.82 203.06 67.69
B --- --- --- --- ---
C --- --- --- --- ---
D --- --- --- --- ---
E --- --- --- --- ---
F --- 11.05 -37.68 -30.79 -15.40
G --- --- --- --- ---
Average 51.91 40.91 -10.43 86.13 26.15Before concluding this sub-section, we need to take a brief look at the
changes in depositors’ share of profit, in terms of absolute changes and
deposits’ profitability index in relation to the size of deposits. This is what is
illustrated in Tables 9 and 10.
Table 9: Percentage Growth of Depositors’ Profit Share
BANK 1998/99 1999/2000 2000/2001 1998/2001 Average
A -13.92 72.79 10.64 64.56 21.52
B -15.00 -35.29 12.12 -38.33 -12.78
C 28.91 43.03 -1.91 80.86 26.95
D 12.84 24.55 -25.96 4.05 1.35
E 9.57 5.84 -33.88 -23.62 -7.77
F --- -11.48 -23.62 -32.39 -16.19
G 3.65 11.39 -12.18 1.39 0.46
Average 4.34 15.83 -10.68 8.12 1.93From Table 9 we find that the absolute value depositors’ share has
dropped in three out the seven banks over 3 years. In banks B and F, this
drop can be explained in part by the drop in investment deposits. But in bank
E, depositors’ share dropped despite the increase in investment deposit as