April 11, 2024ETIKONOMIOpen Access

Is the COVID-19 Matters for Islamic Banking Performance? A Cross-Countries Analysis

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Randomized trial identifies the decline in Islamic bank performance during COVID-19, suggesting new financial strategies are needed.

Islamic banking performance decreased significantly during COVID-19, with key metrics like return on equity declining.
The analysis revealed that performance measures, including return on average asset and net profit margin, were negatively impacted.
Panel data analysis across 12 countries was employed from Q4 2016 to Q1 2022, highlighting specific performance metrics and risk factors in Islamic banking sectors worldwide, with fixed effect modeling used to analyze trends and outcomes effectively or accurately in assessing bank performances observed and documented in literature on economic downturns and crisis response strategies for the sector in relation to pandemic impacts experienced in the financial ecosystem globally and financial oversight relevant to new standards introduced in adaptation of financing mechanisms reviewed alongside existing operational frameworks for Islamic financial entities operating within affected markets and economies globally. The analysis considered crucial control variables, such as inflation rates and bank sizes, which play roles in influencing overall bank performance during turbulent times, underscoring the complex interactions within financial systems.

Nugrohowati et al. (2024) studied this question.

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