ISLAMIC AND CONVENTIONAL BANKS’ GOVERNANCE IN THE GCC REGION: A COMPARATIVE ANALYSIS OF RISKBASED FINANCIAL PERFORMANCE
Date
2025-05-20
Journal Title
Journal ISSN
Volume Title
Type
Article
Publisher
Virtus Interpress
Series Info
Journal of Governance and Regulation ; Volume 14, Issue 2, Pages 254 - 264 , 2025
Scientific Journal Rankings
Abstract
This study measures the risk-taking behaviour of banks in the Gulf
Cooperation Council (GCC). Then, it investigates how this risktaking leads to enhanced financial performance for Islamic banks
compared to conventional banks. Our sample includes all locally
incorporated 63 chartered banks, including 22 Islamic banks and
41 conventional banks in the six GCC countries for 13 years
between 2003 and 2015. We adopt regression analysis, whereas
the mean difference test is used to evaluate the variance of
performance. The analysis shows that banks’ internal growth
significantly determines risk-taking and financial performance.
GCC’s Islamic banks are riskier than their conventional
counterparts. Two measures of risk have rarely been observed as
statistically significant factors for determining the profitability of
conventional banks. Ultimately, the category of the bank in the GCC
region significantly impacts financial performance as a whole, and
therefore, bank policy must be considered. The results provided
valuable perceptions to Islamic and conventional banks across
the GCC, allowing them to improve their financial performance by
considering risk-taking behaviour. It likewise provides information
that supports investors, regulators and executive managers in GCC
countries. The study’s originality lies in its contribution to GCC
nations by presenting a comparative view of the two clusters
of banks.
Description
SJR 2024
0.195 Q4
H-Index
12
Keywords
Bank Risk-Taking, Conventional Bank, GCC Region, Islamic Banks, Return on Assets, Return on Equity
Citation
Zulfiqar, S., Alqatan, A., Alsaber, A., Al-Sabah, M., Alshammari, T., & El-Halaby, S. (2025). Islamic and conventional banks’ governance in the GCC region: A comparative analysis of risk-based financial performance. Journal of Governance and Regulation, 14(2, special issue), 254–264. https://doi.org/10.22495/jgrv14i2siart4