2019
DOI: 10.1108/jefas-05-2018-0043
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Abstract: Purpose The purpose of this study is to investigate the effect of internal and external variables on the profitability of conventional banks operating on developing and underdeveloped countries, the Organization of Islamic Cooperation (OIC) states. Design/methodology/approach In this paper, the author uses ordinary least squares fixed-effects model on an unbalanced panel data set of all conventional banks operating in OIC countries (52 countries included from 57) over the period 1989-2008, 686 banks. Findi… Show more

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Cited by 58 publications
(56 citation statements)
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“…Some authors, for example, Kosmidou et al (2005), Zhang andDong (2011), Tembe (2011) and Hammami et al (2018) reported a positive effect, while others, namely Garcia and Guerreiro (2016), reported a negative effect but with low statistical significance. Similarly to our results, Al-Harbi (2019) found this variable insignificant.…”
Section: Resultssupporting
confidence: 89%
“…Some authors, for example, Kosmidou et al (2005), Zhang andDong (2011), Tembe (2011) and Hammami et al (2018) reported a positive effect, while others, namely Garcia and Guerreiro (2016), reported a negative effect but with low statistical significance. Similarly to our results, Al-Harbi (2019) found this variable insignificant.…”
Section: Resultssupporting
confidence: 89%
“…Further, banks engage in off-balance sheet activities hoping to earn additional income to compensate for the decline of its earnings from traditional activities. Conversely, banks that are heavily involved in nontraditional activities are subject to higher risks which may lead to lower profitability (Al-Harbi, (2019). Studies like Valverde & Fernández, (2007), Nguyen, (2011), Sufian, (2011), Petria et al, (2015 etc.…”
Section: Literature Reviewmentioning
confidence: 99%
“…found negative relationship between them. By following the study of Al-Harbi, (2019), this study has used other operating income to total assets as a proxy of Off-balance sheet activities. In addition, Al-Homaidi et al, (2018) argued that the number of branches is the most significant bank-specific determinants that influence the banks' profitability.…”
Section: Literature Reviewmentioning
confidence: 99%
“…The results of this study indicate that the 4 hypotheses are supported. The first hypothesis in this study is that interest rates have a positive and significant effect on bank profitability as found by (Al Harbi, 2019) that real interest rates drive bank profitability. In addition, the results of the study indicate that the development of the banking sector and the distribution of bank credit will increase profitability in the long term; (Adetunji & Oladele, 2017) the findings show that there is a significant positive relationship between credit interest rates and bank profitability.…”
Section: Discussionmentioning
confidence: 86%
“…The increase in credit interest rates will affect banking operational activities in financing and channeling funds, so that it will increase bank income or profit. Research (Al Harbi, 2019) states that real interest rates encourage bank profitability, the results of the study show that the development of the banking sector and bank credit distribution will increase profitability in the long term. The results of this study support previous research, namely (Satria & Sudjarni, 2016) which states in their research that interest rates have a significant positive effect on stock returns of food and beverages companies on the Indonesia Stock Exchange.…”
Section: The Effect Of Interest Rates On Banking Profitabilitymentioning
confidence: 89%