Exposing Islamic Banks to the risk of financial failure using the Sherrod and Kida models: Umnia Bank case study

  • Lotfi Boulahrir National School of Business and Management of Marrakech, Cadi Ayyad University of Marrakech, Morocco
  • fayçal hassoune National School of Business and Management of Marrakech, Cadi Ayyad University of Marrakech, Morocco
Keywords: Islamic Bank, Risk, Financial Failure, Sherrod Model, Kida Model, Umnia Bank

Abstract

In this article, we have to discuss a new industry, Islamic finance keeps growing from year to year, in addition, the development of Islamic finance boosts us not to ignore it. In this study, we opted to adopt the funnel rule the general to the particular. Indeed, we launched this research by elucidating the notion of Islamic finance and its principles to get into the journey of participating banks in Morocco by relying on their developments. In this study, we have highlighted the various risks, generic or specific, which Islamic banks are inclined to.

 We tried to measure the degree of Umnia Bank’s exposure to the risk of financial failure based on the models of Sherrod and Kida. The choice of models is not arbitrary, but it is extremely beneficial because they are the most used like Altman’s model, and for to check the probability of existence of discrepancies in the model outputs. Finally, we measured the value of “Z” using both models to verify the degree of exposure of Umnia Bank to the risk of financial failure.

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Published
2021-09-02
How to Cite
Boulahrir, L., & hassoune, fayçal. (2021). Exposing Islamic Banks to the risk of financial failure using the Sherrod and Kida models: Umnia Bank case study. International Journal of Accounting, Finance, Auditing, Management and Economics, 2(5), 111-125. https://doi.org/10.5281/zenodo.5393654
Section
Articles