Financial Leasing in Palestinian Islamic Banks and Its Role in Enhancing Financial Performance: An Analytical Study

Abstract

The study aims to test the impact of financial leasing on the financial performance of Islamic banks in Palestine during the period between 2010 and 2019, in an attempt to show the role of financial leasing in enhancing financial performance indicators represented by rate of return on deposits, rate of return on ownership, rate of return on investment and rate of return on available assets. The study found an impact of financial leasing on the study's dependent variables including indicators of financial performance. The results showed that financial leasing achieves high efficiency in the use of assets. The study recommended the necessity of urging Islamic banks in Palestine to use more financial leasing tools in order to increase banks' revenues, and to benefit from the experiences of advanced banks regarding financial leasing. For Islamic banks in Palestine, it is important expand the volume of investment in financial leasing assets. The study assist Islamic banks in Palestine to achieve diversification in the fields of financial leasing in line with the principles of Islamic Sharia. This assists in improving Islamic products offered through financial leasing activities and developing them in line with international development. Previous studies provided an unclear image for using financial leasing on the financial performance of Islamic banks in especially Palestine. Numerous aspects differentiate this paper and contribute to its originality, by examining the impact of financial leasing on the financial performance of Islamic banks in Palestine during the period between 2010 and 2019.