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Resilience and performance of Islamic and conventional banks amid oil price uncertainty

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  • Tanin, Tauhidul Islam
  • Shaiban, Mohammed Sharaf Mohsen
  • Hasanov, Akram Shavkatovich
  • Brooks, Robert

Abstract

The influence of religiosity on stock price performance continues to be a subject of debate, particularly in dual banking systems, where Islamic banks (IBs) operate alongside conventional banks (CBs). This study uses an extensive dataset and applies a recursive window-based asymmetric VAR-GARCH-in-mean-BEKK model to examine the impact of oil price uncertainty (OPU) on IBs and CBs' stock returns in net oil-exporting (Egypt, Indonesia, Kuwait, Nigeria, Oman, Qatar, Saudi Arabia, and the UAE) and oil-importing (Bangladesh, Jordan, Pakistan, and Turkey) countries. Although the findings provide partial insights into IB resilience, they are inconclusive enough to holistically confirm the superiority of either IBs or CBs. This study contributes to the existing literature and emphasizes the need for further investigation of these dynamics. Understanding the effect of OPU on bank profitability is essential for long-term investors, policymakers, and those involved in regulatory reforms focused on promoting economic growth, profitability, and risk management within a dual banking system.

Suggested Citation

  • Tanin, Tauhidul Islam & Shaiban, Mohammed Sharaf Mohsen & Hasanov, Akram Shavkatovich & Brooks, Robert, 2025. "Resilience and performance of Islamic and conventional banks amid oil price uncertainty," Energy Economics, Elsevier, vol. 148(C).
    • Handle: RePEc:eee:eneeco:v:148:y:2025:i:c:s0140988325004645
    DOI: 10.1016/j.eneco.2025.108637
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    JEL classification:

    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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