Islamic Banks' Profitability in an Interest Rate Cycle
International Journal of Islamic Financial Services (now IBF Review)
July - Sept 2002
Excerpts: "All in all, not only does Islamic banks’ profitability seem less volatile than that of conventional peers, but it is also higher on average, at least in the GCC region. These two elements are essential for assessing the soundness of Islamic banks’ financial profile and creditworthiness. Islamic banks thus seem less vulnerable to the cyclical nature of returns on assets and costs of liabilities."
"On the other hand, Islamic banks lose on the grounds of liquidity, assets and liabilities concentrations and operational efficiency what they tend to win in the field of profitability."