The Role of Financial Planning in Improving the Financial Performance of Islamic Banks: A Case Study of the Libyan Islamic Bank

Abstract

The objective of this research is to identify the role played by financial planning in improving the financial performance of Islamic banks. The research was conducted on the Libyan Islamic Bank during the period (2021–2024). The descriptive–analytical approach was used in the theoretical aspect, while the case study method was applied in the practical aspect. The research concluded that the use of a sound financial planning approach requires the availability of accurate information and data and their comparison with the actual results of the fiscal year. Financial planning plays a significant role in evaluating and improving the financial performance of institutions through deviation analysis and corrective actions. Weak forecasting of cash outflows, which in turn was reflected in the estimation of expense values, affected net income. The failure to conduct comparisons and studies of deviations resulting from differences between actual and estimated values, to identify the causes of these deviations and address them, and to attempt to prevent their recurrence in subsequent years, has a negative impact on the financial performance evaluation of Islamic banks.