Author
ONER, Muhammed Hadin
Publication Place
University of Afyon Kocatepe -
University of Afyon Kocatepe
Subject
Kocatepe Islamic Sciences journal: (Online), 2023-10, Vol.6 (Special Issue), p.161-180
Type
kitap
Language
ara,eng
Digital
Yes
Manuscript
No
Library
Leitir Library
Library Asset ID
ISSN: 2757-8399, EISSN: 2757-8399, DOI: 10.52637/kiid.1352281
Record ID
cdi_doaj_primary_oai_doaj_org_article_1e176aca03c946018319a42bdef059f0
Library Location
DOAJ (Directory of Open Access Journals)
Notes
The participation finance ecosystem has been accepted in a wide geography in recent years. This situation is not limited only to Muslim countries but also includes non-Muslim countries. The background of the interest in participation finance products lies in the fact that these products are inherently built on interest-free principles and have a strong structure, compared to their traditional counterparts. Among the participation finance products, sukuk, one of the Participation Capital Market products, attracts the most attention with its asset-based structure. Sukuk has a very different structure than its equivalent bonds. Bonds are debt securities that do not contain any underlying assets and promise to pay principal and interest to bondholders on a certain date. Sukuk, on the other hand, is an asset-based securitization transaction and is an instrument that does not commit principal and profit to sukuk owners. The growth volume of the sukuk instrument, which started to be used at the end of 1970, has reached gigantic proportions over the years. The growth momentum of sukuk markets in the last decade plays an important role in increasing the market share of participation finance in financial markets. Sukuk issuances in world markets increased from 107 billion dollars to 188 billion dollars in the 2014-2021 period. In 2022, the share of sukuk issuances in the participation finance ecosystem reached 25%. The highest volume in this share in 2021 is Saudi Arabia with a 33.5% share, Malaysia with a 25% share and Indonesia with a 15% share. Turkey has a 6.9% share in the global sukuk markets. Sukuk is an instrument used to evaluate savings and provide funds without interest. This financial instrument, designed to contribute to the financing of major projects that benefit society, offers various financing opportunities for both private and public projects, as well as opportunities for individuals to participate in this process. Sukuk issuances, especially by participation banks, are in great demand. This demand is also reflected in the volumes of sukuk issued by participation banks. Sukuk issuances reached 83 billion ₺ from 2.5 billion ₺ in the 2015-2022 period. In this context, the study investigated how sukuk issuances, which are an important source of income for participation banks, affect the financial performance of participation banks. For this purpose, return on assets (ROA) and return on equity (ROE) were considered as financial performance indicators of participation banks. It was examined by panel data analysis method using quarterly data for the period 2015Q1-2023Q2. The data discussed was obtained from the Participation Banks Association of Turkey (TKBB), Bank activity reports, Turkish Statistical Institute (TURKSTAT) and the Central Bank of the Republic of Turkey Electronic Data Distribution System (EVDS). In addition, bank size, inflation, exchange rates, GDP (Gross domestic product growth rate), interest rates and unemployment variables were also used in the analysis. According to the findings, sukuk issuances, bank size and inflation positively affect the financial performance of participation banks; It has been observed that non-performing loans and foreign exchange rates have a negative impact. It was determined that GDP, interest rates and unemployment variables were not statistically significant. The results obtained as a result of the findings are reported in the literature (Saad and Haniff, 2013; Mimouni et al., 2019; Ho and Mohd-Raff, 2019; Ergün, 2020; Al-Harbi,2020; Hidayat et al., 2021; Bouhider, 2021, Le et al., 2022; Ledhem, 2022; Akın and Duramaz, 2022) coincides with the study results. According to the analysis results, it is seen that sukuk issuances, which have become an important instrument at the global level, play a positive role on the financial performance of participation banks. Therefore, in addition to increasing sukuk issuances, it can be stated that the dissemination of sukuk types such as green sukuk and blue sukuk can be an important financial product for participation banks. The participation finance ecosystem has gained widespread acceptance over a significantly expanded geographical scope in recent years. This phenomenon extends beyond solely Muslim countries and encompasses non-Muslim nations as well. The foundation of interest-free principles underlies the growing interest in participation finance products. Among these products, Sukuk, a type of finance participation instrument, garners the most attention. Unlike conventional bonds, Sukuk possesses a distinct structure. Bonds are interest-based instruments that represent debt obligations, wherein individuals commit to paying principal and interest. In contrast, Sukuk involves the securitization of underlying assets and represent ownership stakes. Sukuk, therefore, is an instrument in which individuals are not only assured of their principal but also entitled to a share of profits. Since its inception in the late 1970s, the Sukuk instrument's volume has expanded consistently over the years. The momentum of growth in Sukuk markets over the past decade has significantly contributed to the increase in the market share of participation finance. Global Sukuk issuances in the world markets escalated from $107 billion to $188 billion during the period of 2014-2021. In 2022, Sukuk issuances captured a 25% share of the participation finance ecosystem. Among these shares, Saudi Arabia led with the highest volume at 33.5%, followed by Malaysia at 25%, and Indonesia at 15%, while Turkey held a 6.9% share in the global Sukuk market. Sukuk, as a tool, is employed for the purpose of deploying savings and acquiring funds through interest-free mechanisms. It has been designed to contribute to the financing of substantial projects, catering to both private and public initiatives. The prominence of Sukuk is particularly notable in the offerings of participation banks, influencing the volume of Sukuk issuances they engage in. The trend in demand is mirrored in the growth of Sukuk issuances, escalating from 2.5 billion ₺ to 83 billion ₺ within the 2015-2022 period. In this context, the research investigates how Sukuk issuances impact the financial performance of participation banks. For this purpose, active profitability (Return on Assets - ROA) and capital profitability (Return on Equity - ROE) have been considered as financial performance indicators of participation banks. The study employs panel data analysis method using quarterly data from the period of 2015Q1 to 2023Q2. The data utilization in the study are sourced from various references including the Participation Banks Association of Turkey (PBAT), bank activity reports, Turkish Statistical Institute (TUIK), and the Electronic Data Distribution System of the Central Bank of the Republic of Turkey (CBRT - EVDS). Additionally, variables such as bank size, inflation, exchange rates, GDP growth rate, interest rates, and unemployment have been incorporated into the analyses. The findings indicate that Sukuk issuances positively influence the financial performance of participation banks along with bank size and inflation, while adversely affecting non-performing loans and exchange rates. However, GDP, interest rates, and unemployment variables were not statistically significant. The results align with findings from existing literature (Saad and Haniff, 2013; Mimouni et al., 2019; Ho and Mohd-Raff, 2019; Ergün, 2020; Al-Harbi, 2020; Hidayat et al., 2021; Bouhider, 2021; Le et al., 2022; Ledhem, 2022; Akın and Can't Stop, 2022). According to the analysis results, it is observed that sukuk issuances, which have become a significant instrument on a global scale, play a positive role in the financial performance of participation banks. Therefore, it can be stated that the proliferation of sukuk types such as green sukuk and blue sukuk, in addition to increasing sukuk issuances, may carry significant financial product characteristics for participation banks.
Detaylı Başlık
Sukuk İhraçlarının Katılım Bankalarının Finansal Performansı Üzerindeki Etkisi
