*4.2.2.1 Bank size*

According to **Table 10**, the close effect of the CBs'size weakened their FPs and, more precisely, their efficiency and liquidity. This implies that for CBs that become exceptionally large, their size negatively affects their FP because of the bureaucracy, the transactions' complexity, and the huge number of branches. This result means that despite their enormous sizes, the CBs were limited in their ability to produce, manage, or market these ranges of services through their multiple subsidiaries. Moreover, this indicates that the FP speed and the scale of transformation of the asset values at these banks are very slow and insufficient to create growth. Our CBs'sample generally used a poor policy of managing their product and service lines and a poor orientation to launch new competitive products, to practice the scale sale commercial policy, or to order their business priorities. Indeed, our results showed that the CBs developed in a badly controlled way and exceeded their threshold sizes. Therefore, any extension beyond the optimal size or that exceeds the possible localization limit on the financial market has the opposite


**Table 10.**

*Summary of the close effects of the bank size on the FP of conventional and Islamic banks.*

consequences. There are other reasons that may be at the origin of the obtained results, given the expansion of large CBs' branches or the presence of financial corruption centers within large CBs' groups. Among these, we cite the poor control of the financial information process, the management of accounting results, the misuse of resources, the handling of expenses, revenues and provisions, and uncontrollable governance structures. All these reasons caused the explicit and implicit dwindling of the CBs' FP.

On the contrary, **Table 10** gives an inverse combined effect. Indeed, the increase in IBs'size was reached according to income, profits, assets, and employees; all these are important to increase their efficiency, liquidity, and solvency, despite the strong competition that negatively weighs on their profitability. Large IBs have good cost management policies and abilities. Thus, effective big sales management and efficient big asset management automatically generate excess liquidity. Besides, large IBs can produce cheaper goods than small CBs because they can spread their fixed costs over a greater number of services and achieved more learning and cumulative experience. Also, since we worked on a large IBs'sample, their size encouraged them to raise their assets and their capital base, as this would re-enhance their efficiency after a financial crisis period. Moreover, as Mule et al. [128] revealed, a unit change in firm size in terms of return on equity leads to a rise in its FP. Even more, the positive association between IBs'size and FP stems from the IBs that implemented greater differentiation and a variety of services compared to their conventional counterparts. The IBs have succeeded in relaunching specialization strategies that are likely to be concurrently provided to their customers. Therefore, this is why the IBs'size generated a strengthening effect on efficiency, liquidity, and solvency at a time when the IBs'size negatively influenced their profitability.

### *4.2.2.2 Bank age*

Referring to **Table 11**, the CBs' age significantly improved all their FP measures. As a result, the longer the CBs were created and advanced in time, the more efficient they became. In our case, the CBs' experience offered them the ability not only to resist variations in FP parameters but also to acquire the necessary skills to avoid risky events and serious financial transactions that might impact their FP. Besides, seniority enabled the CBs to plan a harmonious internal audit scheme for their FP, leaving the fewest gaps between the different measures. Older banks went through difficult situations and learned many lessons that seriously affected their FP in the past, especially during the financial crises periods. Thus, aged CBs prepared advance planning and risk management programs for all their FP measures. Hence, they estimate the evolution of each FP measure so as to correct, improve, and maximize it daily. During the period of our study, CBs showed that they gained immunity through seniority, so they are vaccinated against financial shocks. They also amended the sudden factors that might act negatively on FP and benefited from opportunities to maximize their profitability, efficiency, liquidity, and solvency. In addition, the older CBs enjoy a solid reputation that


**Table 11.**

*Summary of the close effects of the bank age on the FP of conventional and Islamic banks.*

### *How to Successfully Select the Best-Performing Bank Based on the Best Auditor's… DOI: http://dx.doi.org/10.5772/intechopen.113201*

could help them mobilize their resources to implement appropriate business strategies that allow them to guarantee their sustainability and their FP continuity.

The same table showed that the combined effect of the IBs' age recorded a driving and significant influence on their profitability, efficiency, and solvency. However, our sample includes some recent IBs, so their combined impact on the IBs' FP is positive. The IBs' experiences, measured by the bank's age, resulted in the last stage in the accumulation of profitability, efficiency, and solvency. However, the individual negative impact on the IBs' liquidity is accounted for by the mismanagement and under exploitation of liquidity reserves. Also, the older the IBs, the more they can develop a reputation in the credit market with other banks, the more they control their expenses, and the more gradually they shrink the information asymmetry with borrowers in the event of their existence through the guidance policy that builds on the reputation of their credit history. As a result, new IBs are riskier than old ones. The latter, being older, become more famous and well-known to lenders, and are therefore more capable of developing longer relationships and making the most profitable, efficient, and solvent investment choices that can create more wealth for the IBs. Furthermore, when partners request funding for investments, the old IBs' risks are easier and faster to assess by stakeholders than the evaluation of recent IBs' risks.

### *4.2.2.3 Bank type*

Referring to **Table 12**, the CBs'segmentation by specialization into three types weakens their FPs. More precisely, with reference to the most commonly used classification and segmentation into commercial banks, investment banks, and universal banks, CBs' profitability, efficiencies, and solvency are depleted. The economic phenomenon we are talking about indicates that the CBs' customers will be divided into several divisions of the same sector. This policy does not meet the forecast axes; it contradicts the planning and limits the choices, opportunities, and fields of activities facing the banks' decision-makers. This orientation also costs the CBs extra expenses that make them lose money due to competition. This constraint type causes the creation of many nodes with financial problems. Therefore, the strong rivalry in the market for goods and services creates financial difficulties, which consequently lead to a decrease in CBs' FP. If we adopt the cost function as the first criterion to evaluate CBs, we retain the intermediation approach, where bank products are loans, direct and indirect commissions, and other income-generating assets. Our findings reveal that the presence of competition between CBs reduces both their profitability and efficiency levels, which results in a drop in FP as a whole.

Similarly, **Table 12** shows that the IBs'specialization within the same sector causes a drop in their FP. But unlike CBs, in this case, the IBs focus on specific customer niches in particular had a negative impact on their liquidity and, to a lower degree, their profitability and efficiency due to the reduction in the scope of banks' practice


**Table 12.**

*Summary of the close effects of the bank type on the FP of conventional and Islamic banks.*

within the same sub-sector. The inadmissible impact is explained by several reasons, such as sharing the same commercial or investment activity between several Islamic competitors, who themselves compete with other conventional competitors in the financial market and the capital market. This confirms that IBs operate under financial stress, which leads to their isolation and suffering with regard to financial flows. Besides, sharing the IBs' customers among several specialists makes it possible to represent a problem in marketing their products insofar as the customers' number is always limited. IBs' clients are retained by religious convictions and are not overly motivated by financial interests, as in the instance of CBs. Furthermore, sectoral specialization is oriented towards specific activities that require a high development cost and a diversification of their services to face their competitors' pressures and gain an advantage over them. Attracting more customers and maximizing FP, specifically profitability and liquidity, always remains a limited probability since the chosen commercial policy is limited to a few products. Moreover, IBs suffer from a shortage of product and service diversity, which can attract more customers and increase their business margins. Indeed, IBs retain the Islamic finance principle; they are not allowed to earn additional products through the mobilization of additional sources. This attitude is the result of operational failure and poor management efficiency, which are seriously reflected in their profitability and, more precisely, in their liquidity.
