FINANCIAL RISK AND ISLAMIC BANKS’ PERFORMANCE IN THE GULF COOPERATION COUNCIL COUNTRIES

Hussein A. Hassan Al-Tamimi, Hela Miniaoui and Walaa Wahid Elkelish

The International Journal of Business and Finance Research, 2015, vol. 9, issue 5, 103-112

Abstract: This study examines the relationship between financial risk and performance of Gulf Cooperation Council Islamic banks and the relative importance of the most common types of risk. The study covers 11 of the 47 Islamic banks of the Gulf Cooperation Council region from 2000 to 2012, based on the availability of data. Data were obtained from the Bankscope database. For bank performance, the two most common measures, ROA and ROE, were alternatively used and for risk measures. Four types of financial risk were used, namely credit risk, liquidity risk, operational risk, and capital risk. Regression analysis indicate there exists a significant negative relationship between the Gulf Cooperation Council Islamic banks’ performance, capital risk and operational risk. The results also confirm a significant negative relationship between Gulf Cooperation Council Islamic banks’ performance. Furthermore, the results indicate that the most important type of risk is capital risk, followed by operational risk

Keywords: Bank Performance; Financial Risk; Gulf Cooperation Council Islamic Banks (search for similar items in EconPapers)
JEL-codes: G20 G21 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (5)

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