Thesis (PhD.) - Cyprus International University. Institute of Graduate Studies and Research Business Administration (Banking and Finance) Department

Includes bibliography (sheets 132-157)

ABSTRACT
Our study fills in the gap in the literature by employing both panel ARDL techniques and the error correction model to investigate the impacts of oil price shocks, Arab revolutions, and some macroeconomics, bank-specific variables, and some bank profitability indicators on the bank profitability between Conventional and Islamic banks, compare the determinants of the profitability and investigate their causal relationship for both Conventional and Islamic banks in the GCC countries. Our results reveal that most of the variables employed in our study significantly influence ROA, ROE, and NIM/NPM for both Conventional banks (CBs) and Islamic banks (IBs) similarly in the long run. Findings from our study imply that both CBs and IBs have some similar features in nature, which could be because of the structure of the policies for IBs is in line with the regulatory framework for the CBs. However, an interesting finding from our study is that the significance of oil price shock and the Arab springs that are more pronounced in the CBs than the IBs. Moreover, it can be seen that a sustainable profit is higher for IBs than CBs because the adjustment speed of the IBs to equilibrium in the presence of shock is higher than that of CBs. Hence, our study suggests that oil price shock could be utilized for having a prudent macro regulation for the banks in the GCC countries. Our findings are useful to Government officers, bankers, investors, and researchers for their decision making by estimating future trends of the profitability for both Conventional and Islamic banks in the GCC countries.