Determinants of Islamic Banks’ profitability : an empirical study (2008-2018)‎

الملخص EN

The purpose of the study is to examine the main factors that may have an effect on the financial profitability of Islamic banks for a sample of 10 banks working in Bahrain, Jordan, Kuwait, United Emirate, and Saudi Arabia, during the period 2008-2018.

The dependent variables under investigation are return on assets (ROA) and return on equity (ROE).

Factors that control banks’ profitability are distinguished into two groups: bank-specific or internal variables and macroeconomic or external variables.

The study uses the fixed effect model to analyze the data.

The study results revealed that: First, the following variables: credit, liquidity risk, LIQ 1 and LIQ2, exchange rates, and inflation don’t have a significant impact on the Islamic banks’ profitability.

Second, the study finds a statistical impact of liquidity (Liq3: total deposits to total loans), GDP, and efficiency on the Islamic banks’ profitability