What Drives Banking Profitability During Financial Crisis and Political Turmoil? Evidence from the MENA Region

Salma Zaiane and Fatma Ben Moussa

Global Journal of Emerging Market Economies, 2021, vol. 13, issue 3, 380-407

Abstract: The purpose of the study is to identify bank specific, macroeconomic, and stability determinants of both conventional and Islamic bank performance. We also try to identify evidence on the impact of financial crisis and political instability during the Arab Spring (AS) period. The study covers a sample of 123 banks (34 Islamic banks and 89 conventional banks from 13 Middle East and North Africa [MENA] countries) over the period 2000–2013. We use different proxies of performance as dependent variables: return on asset (ROA), return on equity (ROE), net income margin (NIM), and estimate several regressions using the dynamic generalized method of moments. Our results reveal that bank size, asset quality, specialization, and diversification are the major bank specific factors affecting performance of Islamic and conventional banks. Besides, macroeconomic indicators (GDP and inflation) and regulatory quality influence both types of banks differently. Finally, both the financial crisis and political instability negatively affect bank performance.

Keywords: Bank performance determinants; Islamic and conventional banks; financial crisis; Arab Spring; GMM method; MENA region (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:emeeco:v:13:y:2021:i:3:p:380-407

DOI: 10.1177/09749101211031102

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