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Factors Influencing Performance Of The Uae Islamic And Conventional National Banks

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  • Hussein A. Hassan Al-Tamimi

Abstract

The objective of this study is to investigate some influential differences in UAE’s Islamic and conventional national banks during the period 1996-2008. UAE Islamic banks have a small market share, though there is an increasing demand for their services. This gives rise to an examination of the factors that influence the performance of these banks compared with conventional banks. A regression model was used in which ROE and ROA were used alternatively as dependent variables. A set of internal and external factors were considered as independent variables including: GDP per capita, size, financial development indicator (FIR), liquidity, concentration, cost and number of branches. The results indicate that liquidity and concentration were the most significant determinants of conventional national banks’ performance. On the other hand, cost and number of branches were the most significant determinants of Islamic banks’ performance.

Suggested Citation

  • Hussein A. Hassan Al-Tamimi, 2010. "Factors Influencing Performance Of The Uae Islamic And Conventional National Banks," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 4(2), pages 1-9.
    • Handle: RePEc:ibf:gjbres:v:4:y:2010:i:2:p:1-9
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    References listed on IDEAS

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    1. Donny Tang, 2006. "The effect of financial development on economic growth: evidence from the APEC countries, 1981-2000," Applied Economics, Taylor & Francis Journals, vol. 38(16), pages 1889-1904.
    2. Hsiu‐Ling Wu & Chien‐Hsun Chen & Fang‐Ying Shiu, 2007. "The impact of financial development and bank characteristics on the operational performance of commercial banks in the Chinese transitional economy," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 34(5), pages 401-414, October.
    3. Gary C. Zimmerman, 1996. "Factors influencing community bank performance in California," Economic Review, Federal Reserve Bank of San Francisco, pages 26-40.
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    Cited by:

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    More about this item

    Keywords

    Bank performance; UAE Islamic banks; UAE conventional national banks;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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