Factors That Affect the Profitability of the Conventional Bank and ShariahBank in UAE
Keywords:
Performance, Profitability, Conventional bank, Islamic bankAbstract
The research aims to investigate factors of profitability affect the performance of conventional bank and Islamic bank in UAE from period 2002 to 2010. With use regressions models, where ROA and ROE are as dependent variables that it’s presenting profitability of bank. Whereas internal and external factors are as independent variables including: GDP per capita, size, financial development indicator (FIR), liquidity, concentration, cost, numbers of branches, operational cost operational income (BOPO), NPL’s ratio, and inflation. The result identify that in conventional bank, in Model I, numbers of branches are the most significant determinant of conventional banks performance and in Model II, numbers of branches, GDP per capita, FIR, and liquidity are the most significant determinant of conventional banks performance. Whereas in Islamic bank, in Model I NPL’s ratio, numbers of branches, and inflation are the most significant determinant of Islamic bank, and in Model II there are not significant determinant of Islamic bank performance.
