IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 4 NO. 3 2019

---

Exploring the Internal Determinants of Kuwaiti Banking Sector Profitability

Musaed S. AlAli, Assistant Professor,

---

Abstract

The aim of this study is to examine the internal factors that mostly affects the profitability of Kuwaiti banking sector. Unlike previous studies, this paper uses the aggregate financials of the whole sector rather than taking each bank individually. The research is based on data spanning over the period 2011-2018. Results obtained from this study revealed that assets size, leverage, and assets quality had a statistically significant effect on both return on assets (ROA) and return on equities (ROE). On the other hand, management efficiency, capital adequacy, and assets growth showed insignificant effect on profitability.

keywords:

Kuwait banking sector, Return on assets (ROA), Return on equity (ROE), Profitability, Leverage

---

References:

Ahmed, A.M. and Khababa,N. (1999) Performance of banking sector in Saudi Arabia, Journal of
Financial Management and Analysis, 12 (2), 30-36.

Akhtar, MF, Ali, K and Sadaqat, S. (2011) Factors Influencing the Profitability of Islamic Banks
of Pakistan, International Research Journal of Finance and Economics, 66. 125-132.

Athanasoglou, P.P., Brissimis, S N. and Delis, M. D. (2005) Bank-specific, Industry Specific and
Macroeconomic Determinants of Bank Profitability. MPRA Paper, No.153.

Bashir, AM. (2000) Assessing the Performance of Islamic Banks: Some Evidence from the Middle
East, Paper presented at the ERF 8th meeting in Jordan. Jordan, Amman.

Bikker, JA. (1999) Efficiency in the European Banking Industry: An explanation analysis to rank
countries, Research Series Supervision No. 18, De Nederlandsche Bank.

Eichengreen, B, and Gibson, HD. (2001) Greek Banking at the Dawn of the New Millennium” in
Bryant, RC, Garganas, NC and Tavlas, GS 2001, “Greece’s Economic Performance and
Prospects”, Bank of Greece and the Brookings Institution, 545-597.

Gujarati, N. (2004) Basic Econometrics: McGraw-Hill Book Company, Singapore.

Halkos, G., and Salamouris, D. (2004) Efficiency measurement of the Greek commercial banks
with the use of financial ratios: a data envelopment analysis approach, Management
Accounting Research, 15, 201-224.

Hussein, K. A. (2003) Operational Efficiency in Islamic Banking: The Sudanese Experience,
Working Paper no. 1, Islamic Research and Training Institute (IRTI), Islamic Development
Bank. 2003.

Idris, A.R., Asari, F.F.A., Taufiq, N.A.A., Salim, N.J., Mustaffa, R.M. and Jusoff, K. (2011)
Determinants of Islamic banking institutions’ profitability in Malaysia. World Applied
Sciences Journal, 12, 01-07.

Koller, M. (2011). Life Insurance Risk Management Essentials, Springer Science and Business
Media.

Malik, H. (2011) Determinants of Insurance Companies Profitability: An Analysis of Insurance
Sector of Pakistan, Academic Research International, 1 (3), 315-321, November, Available
at www.Journals.Savap.Org.Pk.

Masood, O, Aktan, B and Chaudhary, S. (2009) An Empirical Study on Banks Profitability in the
KSA: A Co-Integration Approach, African Journal of Business Management, 3 (8), 374-
382, August.

Schaek, K. and C?ihak, M. (2007) “Banking competition and capital ratios”, Working Paper No.
07/216, International Monetary Fund, Washington, DC, 1 September

Srairi, S. (2009) A comparison of the profitability of Islamic and conventional banks: The case of
GCC countries. Bankers, Markets & Investors, 98, 16-27.

DOWNLOAD PDF

---

Back