Title: Islamic financial institutions performance pre- and post-global financial crisis 2007/2008: empirical insights from Gulf Cooperation Council

Authors: Mosab I. Tabash; Mohammed Alnahhal; Noushin Bagheri

Addresses: College of Business, Al Ain University, P.O. Box 64141, Al Ain, United Arab Emirates ' Mechanical and Industrial Engineering Department, American University of Ras Al Khaimah, Ras Al Khaimah, United Arab Emirates ' NEOMA Business School, Rouen, France

Abstract: The current study examines the financial performance of 19 Islamic financial institutions (IFIs) in five GCC countries, namely the United Arab Emirates, Saudi Arabia, Qatar, Bahrain, and Kuwait. Return on assets (ROA) and return on equity (ROE) were examined in the period ranging from 2006 to 2016. Micro and macro variables are used as independent variables. Some financial indicators such as size, assets management, and financial risk are used as independent variables to predict the dependent variables, namely, ROE and ROA. Multiple linear regression analysis was applied. The global financial crisis 2007/2008 has affected negatively these IFIs systems not only from 2007 until 2009 but also in 2010 and 2011 at a small scale. The predicted values were compared to the real values of ROE and ROA in the period 2007-2011. Results showed that the effect of the global financial crisis occurs in terms of lower ROE and ROA values than predicted by the model. The results of the current study are very beneficial for policy-makers and regulators who are interested in Islamic finance industry.

Keywords: financial crisis; regression models; Islamic finance institutions; systems; Gulf Cooperation Council; GCC.

DOI: 10.1504/IJBSR.2023.127710

International Journal of Business and Systems Research, 2023 Vol.17 No.1, pp.27 - 43

Received: 13 Aug 2020
Accepted: 26 Oct 2020
Published online: 15 Dec 2022 *