Determinants of Banks’ Profitability: Panel Data from Qatar

El-Kassem, Rima Charbaji

doi:10.4236/ojacct.2017.64009

Cited by 9 publications

(6 citation statements)

References 5 publications

(2 reference statements)

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“…The negative influence indicates that poor economic and financial conditions increase loans default leading to lower profitability. These results are in line with Sufian (2009), Hasan and İbrahim (2014) and El-Kassem (2017). In the same vein, operation efficiency correlated negatively and significantly (1%) with profitability indicating that banks in Iran and Sudan operate at higher cost and the results of this paper reinforced Elgadi (2016), Siddique et al (2016), Obeidat et al (2013) and Wasiuzzaman and Tarmizi (2010) conclusion.…”

Section: Resultssupporting

confidence: 87%

Banks’ Profitability in an Islamized Financial System: Comparative Study between Iran and Sudan

Al-Harbi

2020

ijibfr

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The main objective of this paper is to explore and compare the drives of banks’ profitability in Iran and Sudan as both countries Islamized their financial systems, and according to the best of my knowledge is the first paper to compare banks’ profitability on the only two Islamized financial systems in the world, Iran and Sudan. This study employs panel data techniques specifically one-way fixed effect model, data obtained from Bank scope database, to address this paper title for the period 1992-2008. The descriptive statistics results show that Iranian banks are more profitable and have higher loan to total asset ratio in comparison to Sudanese banks. Contrary, Sudanese banks are more liquid; more capitalized and have higher reserves. The regression analysis reported that capital adequacy (positive), loan intensity (negative), management efficiency (negative), lagged GDP growth (positive) and real interest rate (positive) had the same significant effect on banks’ profitability in Iran and Sudan. Meanwhile, liquidity albeit had the same positive effect on banks’ profitability in Iran and Sudan the results were significant in case of Iran. On the other hand, size, credit risk and industry concentration had opposite effect on banks in Iran and Sudan. The effect of size was negative for Iranian banks and positive and insignificant for Sudanese banks. Also, credit risk was negative and significant for Iranian banks and positive for Sudanese banks (insignificant). The same applies for industry concentration as the variable impacted Iranian banks negatively (significant) and Sudanese banks positively (significant).

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Section: Resultssupporting

confidence: 87%

Banks’ Profitability in an Islamized Financial System: Comparative Study between Iran and Sudan

Al-Harbi

2020

ijibfr

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“…According to Abdulkabir et al ( 2020 ), the capital structure and operational costs were negatively correlated. El-Kassem ( 2017 ) discovered that while variance with an independent variable “Cost to Income Ratio” has a negative and significant impact on the variation in bank performance, variability in the exogenous variable such as “Total Capital Ratio” has a positive and significant impact on a bank's performance. According to Koroleva et al ( 2021 ), size, credit quality, as well as liquidity are internal factors that have a significant positive impact on banks' profitability.…”

Section: Literature Reviewmentioning

confidence: 99%

Profitability determining factors of banking sector: Panel data analysis of commercial banks in South Asian countries

et al. 2022

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Aim of the articleThe main purpose of this article was to investigate the impact of the determinants of profitability on the commercial banks in Asian countries. An Asian country like Bangladesh and India was selected as the research field. The present study also pursues to examine the impact of specific factors and macroeconomic factors on the profitability in the Bangladeshi and Indian private commercial banking sectors.Methods applied and analysis toolsThe data were retrieved from the Annual Reports of Indian and Bangladeshi private commercial banks covering the period of 2010–2021. As sample, 40 private commercial banks were considered randomly, of which 20 were from India and 20 were from Bangladesh. The panel data research methodology was used as an estimation technique to analyze the data. Also, the ordinary least squares (OLS) regression model was used to scrutinize data. To check whether the models were appropriate, the Breusch–Pagan Lagrange Multiplier (LM) Test was employed. Banks' specific factors and microeconomic factors showed almost the same variations for both Bangladesh's and India's private banks. All models and tests were evaluated using E-views econometric software.The major findingsThe present study finds that the Return on Asset (ROA) from the banks' specific variables, strength of the Bank size (BS), and Debt to Asset Ratio (DAR) are found to be positive and significant. For banks, the Deposit to Asset Ratio (DTAR) and the Loan to Deposit Ratio (LDR) are found to be negative and significant. The Equity to Asset Ratio (EAR) and Debt to Equity Ratio (DER) do not have any positive/negative impact.Contribution, originality, and implicationsAs macroeconomic variables, the inflation rate (IR) and the GDP growth rate (GDPGR) are measured and found to be positive and significant for ROA. As macroeconomic variables, the Inflation Rate (IR) and the GDP Growth Rate (GDPGR) are found to be positive and significant in the case of ROA. The concerned authorities responsible for regulating the financial performance of the banking sector can use the results of this study to take various fruitful decisions on bank profitability.

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“…On the other hand, the study of the EU banking sector by Staikouras and Wood (2004) and the study of the U.S. banks by Wang and Wang (2015) found that the higher the loan‐to‐asset ratio, the lower the profitability of banks. In the same line, El‐Kassem (2017) found that the higher this ratio, the lower the profitability of banks in Qatar. Moreover, as for credit risk, contrary to the expected results, Akwaa‐Sekyi and Moreno Gené (2016) reveal a negative relationship between these two.…”

Section: Literature Review and Variablesmentioning

confidence: 83%

The effects of the internal control system on the risk, profitability, and compliance of the U.S. banking sector: A quantitative approach

Koutoupis

Malisiovas

2021

Int. J Fin Econ

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This is strong quantitative research investigating whether and how the components of the internal control system affect the credit risk, profitability, and compliance of the U.S. banking sector. Based on the COSO Framework, Basel Committee Frameworks, and the literature, the components of the internal controls are quantified. This quantitative nature distinguishes this study from others in this field since most of the studies up to now have investigated these topics by theoretical approaches. Eleven independent variables are analysed in three different regression models, with credit risk, profitability, and compliance being the dependent variables in each model. After cleaning the data from outliers, several tests are performed, while a panel set of data is used comprising the 210 biggest U.S. bank holding companies. Fixed-effects regression is applied in the three models, while the years under examination are the five fiscal years 2013-2017. Most of the data are taken from the proxy statements (DEF 14A) and the 10-K statements because of their qualitative nature.The key results indicate that Risk Assessment, Control Activities, and Information and Communication components strongly affect credit risk. The first (Control Environment) and last (Monitoring) components have a significant effect on credit risk, though only from the perspective of the board's number and the expertise of the audit committee, respectively. In the same line, internal controls significantly affect the profitability and compliance of U.S. banks, except for the Risk Assessment component in the first case and the Control Environment component in the second case, respectively. Control Activities component and the Information and Communication component have a significant and positive relationship with the banks' profitability, while these two components are significantly and negatively correlated with the banks' compliance.

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Determinants of Banks’ Profitability: Panel Data from Qatar

Cited by 9 publications

References 5 publications

Banks’ Profitability in an Islamized Financial System: Comparative Study between Iran and Sudan

Banks’ Profitability in an Islamized Financial System: Comparative Study between Iran and Sudan

Profitability determining factors of banking sector: Panel data analysis of commercial banks in South Asian countries

The effects of the internal control system on the risk, profitability, and compliance of the U.S. banking sector: A quantitative approach

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