Keywords: Profitability, Islamic banks, Panel data, Middle East, North Africa.


This article aims to examine the impact of internal and external factors on the profitability of 30 Islamic banks operating in the Middle East and North Africa over a period from 2005 till 2018. We use the OLS method according to Panel data. Empirical results indicate that the quality of management, liquidity, and capitalization, quality of services, the presence of women and the competence of staff are significant determinants of profitability. The other determinants including diversification, size and inflation have no significant effect on the Islamic banks' profitability.

JEL Classification Codes: G21, G24, C33, D02.

Author Biographies

Amine Bakkeri, University of Sfax

Faculty of Economics and Management of Sfax, University of Sfax, Tunisia

Abdelhakim Ben Ali, University of Jendouba

Faculty of Law, Economics and Management of Jendouba, University of Jendouba, Tunisia


Abdel-Hameed M. B. (2003). Determinants of Profitability in Islamic Banks: Some Evidence from the Middle East, Islamic Economic Studies, 11(1), 31-57.

Abduh, M., & A. Alias. (2014). Factors Determine Islamic Banking Performance in Malaysia: A Multiple Regression Approach, Journal of Islamic Banking and Finance, 31(1), 44-54.

Abduh, M., & Y. Idrees, (2013). Islamic Bank Profitability: A Study of Islamic Bank in Malaysia, The International Journal of Business Review, 1(1), 51– 62.

Ahmed, A. (2010). Global financial crisis: an Islamic finance perspective, International Journal of Islamic and Middle Eastern Finance and Management, 3(4), 306-320.

Aisyah, M. (2018). Islamic Bank Service Quality and It’s Impact on Indonesian Customers’ Satisfaction and Loyalty, Al-Iqtishad Journal of Islamic Economics, 10(2), 367-388.

Alazzani, A., W. N., Wan-Hussin, & M. Jones, (2019). Muslim CEO, women on boards and corporate responsibility reporting: some evidence from Malaysia, Journal of Islamic Accounting and Business Research, 10(2), 274-296.

Ali, M., & S. A. Raza, (2017). Service quality perception and customer satisfaction in Islamic banks of Pakistan: the modified SERVQUAL model, Total Quality Management & Business Excellence, 28(5-6), 559-577.

AlTamimi, H., H.A. & H. Charif, (2011). Multiple approaches in performance assessment of UAE commercial banks, International Journal of Islamic and Middle Eastern Finance and Management, 4(1), 74-82.

Babalola, Y. A. (2012). The Determinants of Bank’s Profitability in Nigeria, Journal of Money, Investment and Banking, Issue 24, 6-16.

Ben Ali, A. (2017). The Determinants of Tax Returns for Tax Officials: An Essay in the Tunisian Context, International Journal of Accounting and Financial Reporting, 7(2), 323-335.

Daoud, Y., & et A. Kammoun, (2016). Les Déterminants De La Performance Des Banques Islamiques, International Journal of Business & Economic Strategy, 5(2), 22-26.

Dodi, D., D, Supiyadi., & M. Arief, (2018). Islamic Bank Profitability: A Study of Islamic Bank in Indonesia, The international journal of Business Review, 1(1), 51-62.

Eljelly, A. M. A., & A. A. Elobeed, (2013). Performance indicators of banks in a total Islamic banking system: the case of Sudan, International Journal of Islamic and Middle Eastern Finance and Management, 6(2), 142-155.

Hanif, M., M. Tariq, A. Tahir., & W. Momeneen, (2012). Comparative Performance Study of Conventional and Islamic Banking in Pakistan, International Research Journal of Finance & Economics, 83, 62-72.

Haron, S. (1996). the effects of management policy on the performance of Islamic banks, Asia Pacific Journal of Management, 13(2), 63–76.

Hassan, T., S. Mohamad., & M.K.I. Bader. (2009). Efficiency of conventional versus Islamic banks: evidence from the Middle East, International Journal of Islamic and Middle Eastern Finance and Management, 2(1), 46-65.

Iqbal, M., (2020). Islamic finance: An Attractive New Way of Financial Intermediation, International Journal of Banking and Finance,

Jadoon, A.U., Y. Guang., & S. Ali, (2019). The Profitability Analysis of Islamic (Sukuk) vs. Conventional Financing: an Empirical Analysis, Journal of Business Management and Economic Research, 3 (2), 26-41.

Khan, M. M. S., & F. Ijaz, (2014). Islamic Banking in Pakistan: Challenges and Opportunities A Performance Based Analysis, Islamic Banking and Finance Review Vol. 1 N° 1, 49-70.

Khrawish, H. A., (2011). Determinants of commercial banks performance: evidence from Jordan, International Research Journal of Finance and Economics, 81, 148-159.

Munir, B., U. Salwa., & A. Bustamam, (2017). Camel Ratio on Profitability Banking Performance (Malaysia Versus Indonesia), International Journal of Management, Innovation & Entrepreneurial Research, 3(1), 30–39.

Ougoujil, S., & S. M., Rigar, (2018). Ethical Finance and Islamic Finance: Particularities, Possible Convergence and Potential Development, International Journal of Economics and Management Engineering, 12(7), 982-996.

Petria, N., B. Capraru., & I. Ihnatov. (2015). Determinants of banks’ profitability: evidence from EU 27 banking systems, Procedia Economics and Finance, 20, 518 – 524.

Samad A. (2004). Performance of interest-free Islamic banks vis-a-vis interest-based conventional banks of Bahrain, Journal of Economics and Management, 12(2), 12-25.

Short, B. K. (1979). The relation between commercial bank profit rates and banking concentration in Canada, Western Europe, and Japan, Journal of banking & Finance, 3(3), 209-219.

Sinha, C. (2020). Women in the Bahrain Financial Sector: Opportunities, Challenges and Strategic Choices, Social Change, 50(1), 44-60.

Srairi S.A. (2009). Factors influencing the profitability of conventional and Islamic commercial banks in GCC countries. Review of Islamic Economics, 13(1), 5-30.

Sufian, F. (2010). Does foreign presence foster Islamic banks’ performance? Empirical evidence from Malaysia, Journal of Islamic Accounting and Business Research, 1(2), 128- 147.

Sufian, F., & M. S. Habibbullah, (2009). Bank Specific and macroeconomic determinants of bank profitability: Empirical evidence from the China banking sector, Frontiers of Economics in China, 4(2), 274-291.

Sufian, F., & M.S. Habibullah, (2009). Determinants of bank profitability in a developing economy: empirical evidence from Bangladesh, Journal of Business Economics and Management, 10(3), 207–217.

Sufian, F., & M.S. Habibullah, (2010). Assessing the Impact of Financial Crisis on Bank Performance: Empirical Evidence from Indonesia, ASEAN Economic Bulletin Volume 27(3), 245-262.

Supiyadi, D., M. Arief., & N. Nugraha, (2019). The Determinants of Bank Profitability: Empirical evidence from Indonesian Sharia Banking Sector, Advances in Economics, Business and Management Research, 65, 21-26.

Wasiuzzaman, S. (2014). Analysis of corporate cash holdings of firms in Malaysia, Journal of Asia Business Studies, 8(2), 118-135.

Wasiuzzaman, S., & U. N. Gunasegavan. (2013). Comparative study of the performance of Islamic and conventional banks: The case of Malaysia, Humanomics, 29(1), 43 – 60.

Zarrouk, H., K. B. Jedidia, & M. Moualhi. (2016). Is Islamic bank profitability driven by same forces as conventional banks?, International Journal of Islamic and Middle Eastern Finance and Management, 9(1), 46 – 66.
How to Cite
Bakkeri, A., & Ali, A. B. (2020). PROFITABILITY OF ISLAMIC BANKS: A PANEL DATA ANALYSIS. Indian Journal of Finance and Banking, 4(3), 26-38.
Research Paper/Theoretical Paper/Review Paper/Short Communication Paper