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Determinants of Islamic Banks Profitability in MENA Region Before and During the COVID-19 Pandemic Period

In: Islamic Accounting and Finance A Handbook

Author

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  • Hani El Shaarani

Abstract

The first objective of this research is to explain and analyze the financial indicators of the Islamic banking sector in the Middle East and North Africa (MENA) countries before and over the COVID-19 pandemic period, and the second objective is to explore the key determinant that might affect Islamic banks performance before and during COVID-19 pandemic period. Orbis Bank Focus database and annual financial reports are used to collect financial information of Islamic banks in MENA countries over two years: 2019 and 2020. Descriptive statistics, t-test, and multiple regression are employed to analyze the financial structure and performance of Islamic banks before and during COVID-19 pandemic period. The results of this study reveal that there is a sharp drop in financial indicators in Islamic banks during the pandemic period, liquidity risk, bank size, managerial efficiency ratio, and oil price shocks are the determinants of Islamic banks profitability before the appearance of COVID-19. The credit risk, bank size, liquidity risk, managerial efficiency, inflation, and oil price shocks are the determinants of Islamic banks profitability during the pandemic period. Finally, there is no significant impact of GDP and capital structure on Islamic banks profitability before and during the COVID-19 pandemic period.

Suggested Citation

  • Hani El Shaarani, 2023. "Determinants of Islamic Banks Profitability in MENA Region Before and During the COVID-19 Pandemic Period," World Scientific Book Chapters, in: Khaled Hussainey & Hidaya Al Lawati (ed.), Islamic Accounting and Finance A Handbook, chapter 21, pages 623-652, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9781800612426_0021
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    More about this item

    Keywords

    Islamic Accounting; Islamic Finance; Islamic Banking; AAOIFI;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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