Liquidity Risk Management in Islamic Banks- Case study of Al Baraka Bank of Algeria for the period (2008- 2017)

Abstract

One of the most important challenges facing Islamic banks is managing their liquidity risks in both excess and deficit. Islamic banks are striving to adopt an efficient and competitive management that will enable them to maintain minimum liquidity to face depositor’s demands in the future without losing the investment opportunities available to them and Increase their profitability in order to ensure their sustainability in a competitive environment with conventional banks. In order to understand the subject more, we conducted this study, which aims to identify the fact of managing liquidity risk in Al Baraka Bank of Algeria during the period 2008-2017, which was selected as a sample for the study,because its financial statements are available, and was the first bank that practice the Islamic banking activity in Algeria in 1991, We obtained the study data from the financial reports of the bank during the period 2008-2017 and from the bank scoop database, which we analyzed through descriptive approach. Finally, it turns out that the Islamic banks suffer from excess liquidity. This is because it has a large client network and ambitious shareholders, but we note that its transactions remain limited to  BOUYOU’Aand MURABAHA without going through investment formes such as MUSHARAKA, ISTISNA’A and others