Using a panel data approach to determining the key factors of Islamic banks’ profitability in Bahrain

This study examines the effect of bank-specific and macroeconomic key determinants of Islamic retail banks profitability in Bahrain. It used panel data of six Islamic retail banks from 2013 to 2019, and it employed an explanatory research with secondary financial data. Return on Assets (ROA) and Ret...

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Autores principales:	Mohamed Sayed Abou Elseoud, Mohamed Yassin, Mahmood Asad Moh’d Ali
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2020
Materias:	banking islamic banks roa roe gdp inflation Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/97c327357a844e1eb6186b387f62cd75
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spelling	oai:doaj.org-article:97c327357a844e1eb6186b387f62cd752021-12-02T18:23:49ZUsing a panel data approach to determining the key factors of Islamic banks’ profitability in Bahrain2331-197510.1080/23311975.2020.1831754https://doaj.org/article/97c327357a844e1eb6186b387f62cd752020-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2020.1831754https://doaj.org/toc/2331-1975This study examines the effect of bank-specific and macroeconomic key determinants of Islamic retail banks profitability in Bahrain. It used panel data of six Islamic retail banks from 2013 to 2019, and it employed an explanatory research with secondary financial data. Return on Assets (ROA) and Return on Equity (ROE) are two main profitability measures are used in this study. Random effect regression model and Fixed effect regression model are the two statistical models adopted in this study. Random effect regression model shows that Bank size is significantly positively related to banks’ ROA, while operating efficiency and GDP growth have significant and negative relationship with banks’ ROA. Fixed effect regression model shows that there are negative significant effects of credit risk, operating efficiency and GDP growth rate on banks’ ROE. Finally, inflation rate has positive and statistically significant effect on both ROA and ROE. The study recommends that Islamic banks in Bahrain should achieve full benefits form economics of scale, should concentrate on credit risk management, especially on the control and monitoring of non-performing loans. In addition, managers should focus more on modern credit risk management techniques. Finally, Bahraini policy makers must boost the development of the equity market in order to improve bank’s profitability.Mohamed Sayed Abou ElseoudMohamed YassinMahmood Asad Moh’d AliTaylor & Francis Grouparticlebankingislamic banksroaroegdpinflationBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 7, Iss 1 (2020)
institution	DOAJ
collection	DOAJ
language	EN
topic	banking islamic banks roa roe gdp inflation Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	banking islamic banks roa roe gdp inflation Business HF5001-6182 Management. Industrial management HD28-70 Mohamed Sayed Abou Elseoud Mohamed Yassin Mahmood Asad Moh’d Ali Using a panel data approach to determining the key factors of Islamic banks’ profitability in Bahrain
description	This study examines the effect of bank-specific and macroeconomic key determinants of Islamic retail banks profitability in Bahrain. It used panel data of six Islamic retail banks from 2013 to 2019, and it employed an explanatory research with secondary financial data. Return on Assets (ROA) and Return on Equity (ROE) are two main profitability measures are used in this study. Random effect regression model and Fixed effect regression model are the two statistical models adopted in this study. Random effect regression model shows that Bank size is significantly positively related to banks’ ROA, while operating efficiency and GDP growth have significant and negative relationship with banks’ ROA. Fixed effect regression model shows that there are negative significant effects of credit risk, operating efficiency and GDP growth rate on banks’ ROE. Finally, inflation rate has positive and statistically significant effect on both ROA and ROE. The study recommends that Islamic banks in Bahrain should achieve full benefits form economics of scale, should concentrate on credit risk management, especially on the control and monitoring of non-performing loans. In addition, managers should focus more on modern credit risk management techniques. Finally, Bahraini policy makers must boost the development of the equity market in order to improve bank’s profitability.
format	article
author	Mohamed Sayed Abou Elseoud Mohamed Yassin Mahmood Asad Moh’d Ali
author_facet	Mohamed Sayed Abou Elseoud Mohamed Yassin Mahmood Asad Moh’d Ali
author_sort	Mohamed Sayed Abou Elseoud
title	Using a panel data approach to determining the key factors of Islamic banks’ profitability in Bahrain
title_short	Using a panel data approach to determining the key factors of Islamic banks’ profitability in Bahrain
title_full	Using a panel data approach to determining the key factors of Islamic banks’ profitability in Bahrain
title_fullStr	Using a panel data approach to determining the key factors of Islamic banks’ profitability in Bahrain
title_full_unstemmed	Using a panel data approach to determining the key factors of Islamic banks’ profitability in Bahrain
title_sort	using a panel data approach to determining the key factors of islamic banks’ profitability in bahrain
publisher	Taylor & Francis Group
publishDate	2020
url	https://doaj.org/article/97c327357a844e1eb6186b387f62cd75
work_keys_str_mv	AT mohamedsayedabouelseoud usingapaneldataapproachtodeterminingthekeyfactorsofislamicbanksprofitabilityinbahrain AT mohamedyassin usingapaneldataapproachtodeterminingthekeyfactorsofislamicbanksprofitabilityinbahrain AT mahmoodasadmohdali usingapaneldataapproachtodeterminingthekeyfactorsofislamicbanksprofitabilityinbahrain
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Using a panel data approach to determining the key factors of Islamic banks’ profitability in Bahrain

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