Profitability drivers of Islamic banks: A global panel investigation | ||||
| المجلة العلمية للإقتصاد و التجارة | ||||
| Article 15, Volume 49, Issue 2, July 2019, Page 849-882 PDF (402.28 K) | ||||
| Document Type: المقالة الأصلية | ||||
| DOI: 10.21608/jsec.2019.40190 | ||||
 View on SCiNiTO | ||||
| Author | ||||
| Rania Salem Hossameldin Ahmed | ||||
| Egypt | ||||
| Abstract | ||||
| This paper analyzes the profitability of 108 Islamic banks operating across 35 countries over the period 2005-2015 using the GMM estimator technique. We investigate the global panel of Islamic banks under various economic conditions. We study how bank specific factors and macroeconomic conditions impact bank profitability, measured by the return on average assets (ROAA), the return on average equity (ROAE), and the net interest margin (NIM), under different banking environments. The paper investigates the factors that affect the profitability of Islamic banks. The results reveal that bank size, credit risk, CIR, and deposit growth rates have a negative impact on profitability, while bank age, capital adequacy, and liquidity risk positively affect profitability. Moreover, our analysis show that macroeconomic factors measured by GDP growth rates and inflation have a positive impact on profitability. These findings suggest that, based on the current financial reporting system, Islamic banks resembles conventional banks in terms of profitability determinants. JEL classification: G20; G21; Z12 | ||||
| Keywords | ||||
| Islamic banks; Profitability determinants; Global panel; GMM system; Bank performance; financial analysis; Conventional banks; risk analysis; Credit Risk; AAOIFI standards | ||||
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