The Profitability Determinants of Qatari Domestic Banks

ABSTRACT: No doubt that the banking sectors plays a vital role in the economy of all countries. In this sense, the stability of the economy depends basically on the banks’ wellorganized in a country. This study is aimed to examine the profitability determinants of Qatari domestic banks, these banks are Islamic and conventional. The profitability determinants include Return on Assets (ROA) , Return on Equity (ROE), and Net-Non Interest Margin (NNIM). In order to evaluate and compare these profitability variables among two types of banks, 3 Islamic and 6 Conventional banks were selected. The study used panel data which were extracted from the bank’s annual financial reports for the period between 2007and 2013. Applying Stata- software some correlation and regression analysis findings were carried out on data and tried to measure the effect of some independent variables such as; bankspecific factors, which including capital adequacy (CAR), liquidity (LIQD), asset quality (ASQ), management quality (MGQ). In addition to, control factors in term of macroeconomic variables like, the inflation (INF) and Growth domestic product gross (GGDP). Furthermore, we added corporate governance factors in terms of board size and composition (BS) and (BC). In addition, a dummy variable is used in the form of [1] in regards to Islamic banks, otherwise [0] for commercial banks. Regarding our empirical analysis, there was no difference between the two types of banks in terms of ROE and NNIM. However, Islamic banks’ performed better in term of ROA. In regard to factors of macroeconomic and corporate governance, our findings revealed some influence for the board composition (BC), board size (BS), and the inflation (INF). Furthermore, no effect was predicted of the (GGDP) among the profitability determinants. Keywords: Islamic Banks, Conventional banks, Profitability determinants. Financial Ratios. …………………………………………………………………………………………………………………………