Article

 

Financial recession, credit crunch and Islamic banks: A case study of Al Rajhi Bank in th Kingdom of Saudi Arabia (p.15-36)

by

Abdulmonem Alzalabani , Yanbu Industrial College, Saudi Arabia

Reji D. Nair, Yanbu Industrial College, Saudi Arabia

Keywords : Al Rajhi Bank, Islamic Banking, Financial recession, Saudi Arabia, Risk Management, Profitability

JEL classification : G21, G32, G29, G39

Abstract

The paper discusses how Islamic Banks are able to withstand the severity of financial recession, with special emphasis on Al Rajhi Bank in the Kingdom of Saudi Arabia. Al Rajhi is among the most profitable banks in the Middle East; its robust profitability has been largely driven by increasing business volumes, higher margins, and low labor costs. The financial recession has its impact on all banks in the middle east along with western counterparts, but its severity was not heavy for Islamic Banks compared to the latter and the paper concludes that there can be no doubt that Islamic finance has an exciting future; the quest for a financial system based on moral values rather than greed and fear, is bound to enhance its position in the global system.