Table 12 Panel regressions of bank profitability (EARGL) by periods (full sample, precrisis and crisis, and postcrisis)
Variable
Full sample period (2005–2015)
Precrisis and during crisis period
(2005–2009)
Postcrisis period (2010–2015)
Model 1
Model 2
Model 3
Model
13
Model
14
Model
15
Model
16
Model
17
Model
18
Constant
0.2280
0.370
0.7812
0.294
0.9886
0.375
0.6058
0.259
4.0416
0.046**
6.5743
0.257
−0.0112
0.953
−0.1693
0.703
−0.1175
0.804
Deposits/Assets
0.0167
0.933
0.2627
0.533
0.3517
0.501
0.0132
0.979
−0.8262
0.388
0.1223
0.937
0.0545
0.676
0.5884
0.044**
0.1744
0.547
Loans/Assets
−0.3608
0.068*
−1.2474
0.007***
−1.9065
0.060*
−0.5300
0.225
−3.0907
0.032**
−9.1360
0.134
−0.1494
0.313
−0.3113
0.253
−0.0979
0.843
ROA
1.3433
0.126
0.3328
0.869
1.7011
0.574
0.8952
0.612
9.8698
0.086*
10.1148
0.398
2.0593
0.029**
0.4209
0.759
−0.1880
0.899
Other Earning Assets
−0.0687
0.627
−0.3222
0.247
−0.8844
0.195
−0.1031
0.736
−0.1986
0.754
−4.7828
0.132
−0.0502
0.627
−0.1042
0.615
0.1109
0.705
Income Diversity
−0.1424
0.419
0.0196
0.931
0.6744
0.052*
0.2553
0.555
1.9156
0.034**
3.5031
0.016**
−0.2531
0.036**
−0.1420
0.255
0.0535
0.747
Non-Interest Income
−0.1071
0.621
−0.4993
0.102
−1.2034
0.012**
−0.2668
0.558
−3.1214
0.011**
−4.9730
0.012**
0.2981
0.077*
0.0728
0.679
0.0056
0.979
Log(Size)
−0.0044
0.714
0.0069
0.771
0.0356
0.300
−0.0483
0.240
−0.0810
0.262
0.0820
0.548
−0.0050
0.513
−0.0077
0.617
0.0263
0.107
Tier 1 Ratio
−0.7096
0.313
−0.7915
0.421
−0.6797
0.705
−3.1827
0.352
0.2598
0.626
0.2425
0.641
Tangible Equity
0.4331
0.532
0.4548
0.622
−1.6128
0.383
1.1955
0.719
−0.4427
0.362
−0.1450
0.762
Liquid Assets
−0.6074
0.152
−1.5476
0.043**
−1.2250
0.329
−6.5685
0.198
0.4802
0.079*
0.3841
0.280
Funding Fragility
−0.0747
0.790
−0.1524
0.747
0.0736
0.896
0.4538
0.692
−0.4748
0.037**
−0.3856
0.300
Equity Volatility
−0.1269
0.319
0.0409
0.904
−0.1020
0.164
Log(Z)
0.0285
0.547
0.1427
0.348
−0.0689
0.076*
LISTED_D
0.1055
0.159
0.1018
0.370
0.1019
0.499
0.0498
0.739
−0.0221
0.945
0.2296
0.681
0.1346
0.023**
0.1029
0.127
−0.0201
0.761
ISLAMIC_D
0.0455
0.283
0.0667
0.290
0.0672
0.513
0.0338
0.733
−0.1355
0.541
0.0302
0.941
0.0437
0.142
−0.0035
0.924
−0.0558
0.220
CRISIS_D
0.0020
0.967
−0.0321
0.530
−0.0408
0.552
–
–
–
–
–
–
Number of Observations
254
180
117
100
66
37
154
114
80
Number of Parameters
11
15
17
11
15
17
10
15
16
F
0.70
1.41
1.43
0.69
1.35
0.95
1.69
1.32
1.07
Prob > F
0.7252
0.1539
0.1437
0.7352
0.2143
0.5315
0.0973*
0.2154
0.4037
R-squared
0.0280
0.1068
0.1861
0.0715
0.2699
0.4330
0.0953
0.1462
0.2000
Adj R-squared
−0.0120
0.0310
0.0558
−0.0328
0.0695
−0.0206
0.0388
0.0353
0.0125
Root MSE
0.2755
0.2522
0.2381
0.3999
0.3586
0.3902
0.1386
0.1192
0.8447
Breusch–Pagan test of
independence: chi2(6)
82.21
57.65
60.64
37.38
36.90
32.63
35.92
36.90
24.58
*Significance Level (p-value): p***
0.01, p**
0.05, p*
0.10
Note The sample includes 352 observations of 32 banks in the UAE over 11 years. The sample of conventional banks includes 242 observations,
and the sample of Islamic banks includes 110 observations. As the dependent variable to measure the bank’s level of profitability, we use Earning
Assets to Gross Loans Ratio (EARGL). The independent variables used in this analysis are bank-level characteristics, capital adequacy ratios, risk
and ownership structure measures. The regressions analysis tests the significance of the relationships between the dependent and explanatory
variables, the control variables, and the dummy variables for the whole sample, as well as for the samples of Islamic banks and conventional banks.
We run the analysis separately for the full sample period (2005–2015), precrisis and crisis period (2005–2009), and the postcrisis period (2010–
2015)
Banking System in the MENA Region: A Comparative Analysis …
83
Variable
Full sample period (2005–2015)
Precrisis and during crisis period
(2005–2009)
Postcrisis period (2010–2015)
Model 1
Model 2
Model 3
Model
13
Model
14
Model
15
Model
16
Model
17
Model
18
Constant
0.2280
0.370
0.7812
0.294
0.9886
0.375
0.6058
0.259
4.0416
0.046**
6.5743
0.257
−0.0112
0.953
−0.1693
0.703
−0.1175
0.804
Deposits/Assets
0.0167
0.933
0.2627
0.533
0.3517
0.501
0.0132
0.979
−0.8262
0.388
0.1223
0.937
0.0545
0.676
0.5884
0.044**
0.1744
0.547
Loans/Assets
−0.3608
0.068*
−1.2474
0.007***
−1.9065
0.060*
−0.5300
0.225
−3.0907
0.032**
−9.1360
0.134
−0.1494
0.313
−0.3113
0.253
−0.0979
0.843
ROA
1.3433
0.126
0.3328
0.869
1.7011
0.574
0.8952
0.612
9.8698
0.086*
10.1148
0.398
2.0593
0.029**
0.4209
0.759
−0.1880
0.899
Other Earning Assets
−0.0687
0.627
−0.3222
0.247
−0.8844
0.195
−0.1031
0.736
−0.1986
0.754
−4.7828
0.132
−0.0502
0.627
−0.1042
0.615
0.1109
0.705
Income Diversity
−0.1424
0.419
0.0196
0.931
0.6744
0.052*
0.2553
0.555
1.9156
0.034**
3.5031
0.016**
−0.2531
0.036**
−0.1420
0.255
0.0535
0.747
Non-Interest Income
−0.1071
0.621
−0.4993
0.102
−1.2034
0.012**
−0.2668
0.558
−3.1214
0.011**
−4.9730
0.012**
0.2981
0.077*
0.0728
0.679
0.0056
0.979
Log(Size)
−0.0044
0.714
0.0069
0.771
0.0356
0.300
−0.0483
0.240
−0.0810
0.262
0.0820
0.548
−0.0050
0.513
−0.0077
0.617
0.0263
0.107
Tier 1 Ratio
−0.7096
0.313
−0.7915
0.421
−0.6797
0.705
−3.1827
0.352
0.2598
0.626
0.2425
0.641
Tangible Equity
0.4331
0.532
0.4548
0.622
−1.6128
0.383
1.1955
0.719
−0.4427
0.362
−0.1450
0.762
Liquid Assets
−0.6074
0.152
−1.5476
0.043**
−1.2250
0.329
−6.5685
0.198
0.4802
0.079*
0.3841
0.280
Funding Fragility
−0.0747
0.790
−0.1524
0.747
0.0736
0.896
0.4538
0.692
−0.4748
0.037**
−0.3856
0.300
Equity Volatility
−0.1269
0.319
0.0409
0.904
−0.1020
0.164
Log(Z)
0.0285
0.547
0.1427
0.348
−0.0689
0.076*
LISTED_D
0.1055
0.159
0.1018
0.370
0.1019
0.499
0.0498
0.739
−0.0221
0.945
0.2296
0.681
0.1346
0.023**
0.1029
0.127
−0.0201
0.761
ISLAMIC_D
0.0455
0.283
0.0667
0.290
0.0672
0.513
0.0338
0.733
−0.1355
0.541
0.0302
0.941
0.0437
0.142
−0.0035
0.924
−0.0558
0.220
CRISIS_D
0.0020
0.967
−0.0321
0.530
−0.0408
0.552
–
–
–
–
–
–
Number of Observations
254
180
117
100
66
37
154
114
80
Number of Parameters
11
15
17
11
15
17
10
15
16
F
0.70
1.41
1.43
0.69
1.35
0.95
1.69
1.32
1.07
Prob > F
0.7252
0.1539
0.1437
0.7352
0.2143
0.5315
0.0973*
0.2154
0.4037
R-squared
0.0280
0.1068
0.1861
0.0715
0.2699
0.4330
0.0953
0.1462
0.2000
Adj R-squared
−0.0120
0.0310
0.0558
−0.0328
0.0695
−0.0206
0.0388
0.0353
0.0125
Root MSE
0.2755
0.2522
0.2381
0.3999
0.3586
0.3902
0.1386
0.1192
0.8447
Breusch–Pagan test of
independence: chi2(6)
82.21
57.65
60.64
37.38
36.90
32.63
35.92
36.90
24.58
*Significance Level (p-value): p***
0.01, p**
0.05, p*
0.10
Note The sample includes 352 observations of 32 banks in the UAE over 11 years. The sample of conventional banks includes 242 observations,
and the sample of Islamic banks includes 110 observations. As the dependent variable to measure the bank’s level of profitability, we use Earning
Assets to Gross Loans Ratio (EARGL). The independent variables used in this analysis are bank-level characteristics, capital adequacy ratios, risk
and ownership structure measures. The regressions analysis tests the significance of the relationships between the dependent and explanatory
variables, the control variables, and the dummy variables for the whole sample, as well as for the samples of Islamic banks and conventional banks.
We run the analysis separately for the full sample period (2005–2015), precrisis and crisis period (2005–2009), and the postcrisis period (2010–
2015)
Banking System in the MENA Region: A Comparative Analysis …
83