The determinants of bank profitability of GCC: The role of bank liquidity as moderating variable—Further analysis

The motivation of this study stems from the mixed views concerning the determinants of bank profitability and the moderating role of bank liquidity in the relationship. The study primarily aims to investigate the bank profitability determinants among GCC nations. Data are obtained from the GCC banks...

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Bibliographic Details
Published in:International journal of finance and economics 2023-04, Vol.28 (2), p.1423-1435
Main Author: Al‐Matari, Ebrahim Mohammed
Format: Article
Language:English
Subjects:
Bank earnings
Bank liquidity
bank performance
bank profitability
Emerging markets
further analysis
GCC countries
Profitability
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Summary:The motivation of this study stems from the mixed views concerning the determinants of bank profitability and the moderating role of bank liquidity in the relationship. The study primarily aims to investigate the bank profitability determinants among GCC nations. Data are obtained from the GCC banks for the period from 2000 to 2018, and then data are analysed using ordinary least squares (OLS) regression. On the basis of the obtained findings, the size of the bank and the management of assets significantly impact the GCC banks' performance. In addition, bank liquidity has a moderating role in the relationship between capital adequacy and assets quality, and GCC banks' performance. Further analysis shows that the bank's profitability score has a positive association. In addition, bank liquidity has a positive moderate effect relationship between the bank's profitability score and the GCC bank's performance. This study provides implications for the bank profitability determinants in emerging economies, within which there is common profitability, and this is expected to assist policymakers, regulators and shareholders in discerning the banks' attractiveness towards investors.
ISSN:1076-9307
1099-1158
DOI:10.1002/ijfe.2485