Global Financial Crisis (GFC) And Islamic Banks Profitability : Evidence From MENA Countries

This paper investigate the determinant of profitab ility of Islamic banks from the MENA region and how Global Financial Crisi s (GFC) impacts on their performance. The study covers 117 banks for p eriods of 2003 to 2011. To examine the determinant of Islamic banking profitability (ROA), we apply a balanced and dynamic panel data regressi on model. We conclude that the profitability of Islamic banks in the MENA countries is determined positively by asset size, equity to tot al asset, liquidity risk and negatively by capital adequacy ratio, innovation a nd global financial crisis. Positive and significant of asset size underlines t he viability of economies of scale and scope. Foremost, Dummy for crisis is negative and significant indicating Islamic banks are not immune to the cris is. Innovation should be performed with caution, especially on Off-balancesh eet activities. Key Word: Islamic Bank, GFC, Profitability, Innova tion, MENA, Panel Dat