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What Are the Leading Bank-Specific and Macroeconomic Factors Influencing Islamic Bank Performance?: New Evidence From MENA Countries

What Are the Leading Bank-Specific and Macroeconomic Factors Influencing Islamic Bank Performance?: New Evidence From MENA Countries
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Author(s): Mosharrof Hosen (Universiti Tunku Abdul Rahman, Kampar, Malaysia)
Copyright: 2023
Pages: 19
Source title: Research Anthology on Macroeconomics and the Achievement of Global Stability
Source Author(s)/Editor(s): Information Resources Management Association (USA)
DOI: 10.4018/978-1-6684-7460-0.ch065

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Abstract

Despite the proven sustainability and growth of Islamic banks during the financial crisis period, many scholars criticise the current performance of Islamic banks. Therefore, policymakers are continuously getting worried due to inconclusive finding of different research related to Islamic bank profitability. To shed the light of raising concern, this study investigates the issue from considering both macroeconomic and bank-specific factors. The annual cross-sectional data has been collected from 46 Islamic banks in 10 selected MENA countries over the period 2015-2019. The standardized pooled ordinary least square (OLS) approach's findings revealed that bank size, capital adequacy, GDP, and inflation have a significant positive impact on Islamic banks' return on asset, but asset quality has no significant effect on ROA. In contrast, most of the variables have an insignificant effect of ROE. Investors, financial analysts, and policymakers will get benefits from this study's results to secure their investment by successfully controlling the above-mentioned leading factors.

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