Title: The effect of credit risk and banks' specific drivers on banks' performance in light of COVID-19 pandemic: evidence from commercial banks in the UAE

Authors: Zawadi Ally

Addresses: Department of Accounting and Finance, The Institute of Finance Management (IFM), P.O. Box 3918, Dar es Salaam, Tanzania

Abstract: The COVID-19 pandemic has induced a series of credit risk problems for most commercial banks in the Gulf Cooperation Council region. The study aims to examine the impact of both credit risk and bank-specific drivers on commercial banks' financial performance in the UAE using panel data with a fixed effect model on a sample of ten commercial banks over ten years from 2012-2021. The findings revealed a negative association between credit risk and financial performance while COVID-19 negatively affects financial performance. The management efficiency and banks' liquidity, which measures banks' specific drivers, are found to have a negative relationship with financial performance while capital adequacy and bank size are found to have a positive relationship with financial performance. This study contributes to the knowledge gaps on credit risk and banks' performance during the financial crisis nexus and provides valuable information to regulators and bankers.

Keywords: COVID-19; credit risk; bank-specific drivers commercial banks; financial performance; UAE.

DOI: 10.1504/IJAF.2023.134529

International Journal of Accounting and Finance, 2023 Vol.11 No.3, pp.220 - 243

Received: 13 Jul 2022
Received in revised form: 23 Feb 2023
Accepted: 26 Jul 2023
Published online: 26 Oct 2023 *