Abstract :
This study examines the mediating effect of risk and moderating effect of customer relationship management (CRM) of Islamic corporate banking practices on financial performance. While the literature has highlighted the importance of Sharia-compliant capital and financing structures, empirical results are inconclusive in addressing their effectiveness in terms of risk reduction and performance improvement. The study is quantitative in nature with a cross sectional research design and primary data obtained from the employees of corporate banking community of Pakistan. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to examine direct, mediating and moderating relationships. The reliability and validity of the measurement was confirmed by Cronbach's alpha, composite reliability, AVE and HTMT, and the structural relationships were verified by bootstrapping. The findings show that good corporate governance has a significant and strong effect on risk with a value of ? = 0,548 and with a value of p < 0,001, while the Sharia capital structure and Sharia financing structure have no significant direct effect. Risk has a significant positive impact on financial performance (? = 0.560, p < 0.001), and moderates the relationship between the governance and financial performance. While the capital or financing structure does not appear to influence the governance–risk relationship, CRM appears to moderate this relationship. The model accounts for 51.8% of the risk variance and 31.4% of the financial performance variance. The results make significant contributions to the practice of Islamic banking and financial institutions, alongside suggesting avenues for future research with longitudinal and cross-country designs.