The Performance of Islamic Banks During the 2008 Global Financial Crisis: Evidence from Gulf Cooperation Council Countries

Hussien, M.E., Alam, M.M., Murad, M.W. & Wahid, A.N.M. (2019). The Performance of Islamic Banks during the 2008 Global Financial Crisis: Evidence from the Gulf Cooperation Council Countries. Journal of Islamic Accounting and Business Research, 10(3), 407-420. https://doi.org/10.1108/JIABR-01-2017-00

21 Pages Posted: 2 Nov 2014 Last revised: 27 Jan 2022

See all articles by Mohammed

Mohammed

National University of Malaysia (UKM)

Md. Mahmudul Alam

Universiti Utara Malaysia - School of Economics, Finance and Banking

Md Wahid Murad

University of South Australia; University of South Australia

Date Written: October 31, 2014

Abstract

The purpose of this study is to analyse the performance of Islamic banks in terms of profitability of GCC region during 2008 global financial crisis. Bank specific data are taken from the Bank Scope database and macroeconomic data are collected from International Financial Statistics. Using a panel data series of 30 banks for the period of 2005 to 2011, the study shows the availability of structural break for the crisis year as well as the factors that impact the profitability of Islamic banks. The performance of GCC Islamic banks was significantly influenced during the crisis period by capital adequacy, credit risk, financial risk, operational efficiency, liquidity, bank size, gross domestic product, growth rate of money supply, bank sector development and inflation rate. The study also found that there was structural change before and after the global financial crisis. The study concludes that the Sharia compliant banks performed better during the crisis and were not affected based on their internal performance records; rather, they were affected indirectly from the macro shock due to the economic crisis.

Keywords: Islamic Banking, Sharia Compliant, GCC Region, Global Financial Crisis, ROA

JEL Classification: G21, G24

Suggested Citation

Hussien, Mohammed and Alam, Md. Mahmudul and Murad, Md Wahid and Murad, Md Wahid, The Performance of Islamic Banks During the 2008 Global Financial Crisis: Evidence from Gulf Cooperation Council Countries (October 31, 2014). Hussien, M.E., Alam, M.M., Murad, M.W. & Wahid, A.N.M. (2019). The Performance of Islamic Banks during the 2008 Global Financial Crisis: Evidence from the Gulf Cooperation Council Countries. Journal of Islamic Accounting and Business Research, 10(3), 407-420. https://doi.org/10.1108/JIABR-01-2017-00, Available at SSRN: https://ssrn.com/abstract=2517359 or http://dx.doi.org/10.2139/ssrn.2517359

Mohammed Hussien

National University of Malaysia (UKM) ( email )

43600 Bandar Baru Bangi
Bangi, Selangor 06010
Malaysia

Md. Mahmudul Alam

Universiti Utara Malaysia - School of Economics, Finance and Banking ( email )

Md Wahid Murad (Contact Author)

University of South Australia ( email )

City West Campus
North Terrace
Adelaide, South Australia 5001
Australia
+61 8 8302 0384 (Phone)

HOME PAGE: http://https://people.unisa.edu.au/Wahid.Murad

University of South Australia ( email )

North Terrace
Adelaide, South Australia 5001
Australia
5001 (Fax)

HOME PAGE: http://https://people.unisa.edu.au/Wahid.Murad

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