The Performance of Banks in the MENA Region During the Global Financial Crisis

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Suman LodhMiddlesex University Monomita NandyBrunel University London May 2016 AbstractThis paper examines the impact of the global financial crisis on the banking sector in the Middle East and North Africa (MENA) region, as well as the main determinants of the profitability of both domestic and foreign banks. The empirical findings suggest that during the crisis the former outperformed the latter in that region. As for the determinants of profitability, size does not appear to play a role, whilst the liquidity ratio and net interest revenues seem to have a negative and positive effect respectively; GDP has a positive effect in the case of domestic banks.

The Banks Profitability and Economic Freedom Quality: Empirical Evidence from Arab Economies

“…Due to the GFC, the overall industry's business volume reduced and impacted the total banks operations, affecting borrowers' ability to repay loans, forcing the banks to reduce costs and make provisions for credit losses, hence, lowering the profitability. This result is in accordance with Agustini and Viverita (2012), Moutsianas et al, (2016), Caporale et al, (2016) and Islam and Nishiyama (2016), but in contrast with Sufian and Kamarudin, (2012) who find positive and insignificant impact and with Turgutluk (2014), positive but insignificant.…”

“…There are banks profitability studies that focus only on Gulf Cooperation Council countries (GCC), the Middle East and North Africa (MENA) region or an individual Arab country 4 . Although these studies show that it is possible to conduct a meaningful analysis of bank profitability, there are few issues not dealt with sufficiently and estimated results could be biased (Al-Omar and Al-Mutairi, 2008, Bennaceur and Goaied, 2008, Amba and Almukharreq, 2013, Mokni et al, 2014, Alkhazaleh and Almsafir, 2014, Murthy Y and Al-Muharrami, 2014, Caporale et al, 2016, Ghosh, 2016, Abdullah et al, 2017. First, the literature principally considers determinants of profitability with no comprehensive selection for the variables set, countries in the sample under investigation and the short time dimension of the panels used in the estimation.…”

The internal and external determinants of the intermediation margin of banks across MENA countries

“…Caporale et al (2017) find that during the global crisis, size have no effect on banks performance while the level of liquidity has a negative effect and a positive effect on net interest revenues. For macroeconomics determinants, GDP have an impact only for domestic banks.…”

The determinants of commercial banks' profitability in the South-Eastern Europe region: a system GMM approach

“…An additional macroeconomic variable used by the banks' profitability cross-country empirical literature is represented by the rate of inflation. The effect of inflation on banks' profitability is found to be positive and statistically significant in developing and advanced economies (Goddard et al, 2011), conversely the effect is negative and statistically significant in the case of MENA countries (Caporale et al, 2017) as well as emerging markets (Kohlscheen et al, 2018).…”

“…Many studies focusing on the determinants of banks' profitability (Liu and Wilson, 2010;Dietrich and Wanzenried, 2011;Olson and Zoubi, 2011;Chronopoulos et al, 2015;Garcia and Guerreiro, 2016;Caporale et al, 2017;Almaqtari et al, 2018;Batten and Vo, 2019) used two alternative banks' profitability measures, that is return on assets (ROA) and returns on equity (ROE). The former measures the return earned by a bank on its assets, whilst the latter measures the return earned by a bank on its equity capital.…”