Determinants of Bank Profitability – MENA region: EVIDENCE FROM 2006 TO 2015

This study examines the determinants of the bank profitability in the MENA region (Saudi Arabia, United Arab Emirates, Egypt, Kuwait, Bahrain, Qatar and Tunisia) during the period of 2006 – 2015. The data included a mix of Islamic banks and conventional banks (155 banks altogether). The study investigated the performance of the Islamic banks and conventional banks during and after the financial crisis in MENA region. The model stepwise multiple regression analysis used the bank specific and market specific variables to find out the determinants of the bank profitability. The empirical findings suggested economies of scale and the capitalization are the driving force of the bank performance, whereas the credit risk and Loan Loss reserve are negatively significant. The study confirmed the previous literature as Islamic banks outperformed conventional banks