Determinants of Financial Performance for the Banks Sector in Jordan


  • SARI SULEIMAN MOHAMMAD MALAHIMM The World Islamic Sciences and Education University - Islamic Banking. Amman - Jordan


This study contributes to analyze a very important sector in Jordan which is banking sector. This process will be revealed by analyzing the determinants of financial performance for the banks' sector in Jordan during the period 2012- 2016. Return on Assets (ROA) was an indicator to measure the financial performance as dependent variable. On the other side, the independent variables were represented by microeconomic variables and macroeconomic variables.

 According to this study, microeconomic variables were liquidity quick ratio, cash and investments to total deposits, net credit facilities to total deposits, debt ratio, and profit margin.  In addition to that, macroeconomic variables were Gross Domestic Product growth rate (GDP), inflation rate, and unemployment rate as a percentage of total labor force.

After conducting the statistical analysis, there was an impact of profit margin on return on assets at 1% significance level. The study inferred from that there were no impact of the rest of microeconomic variables and macroeconomic variables as well on the financial performance indicator. So, the study recommended banks sector in Jordan to focus and analyze the profit margin beside to analyze the changes in other independent indicators to improve the financial performance for banks sector in Jordan.    

Author Biography

SARI SULEIMAN MOHAMMAD MALAHIMM, The World Islamic Sciences and Education University - Islamic Banking. Amman - Jordan

The World Islamic Sciences and Education University - Islamic Banking and Finance and Banking Sciences .



- Almazari, Ahmad, (2014), Impact of Internal Factors on Bank Profitability: Comparative Study between Saudi Arabia and Jordanâ€, Journal of Applied Finance & Banking, vol. 4, no. 1, 2014, 125-140 ISSN: 1792-6580 (print version), 1792-6599 (online) Scienpress Ltd, 2014

- Alper, Deger; Anbar, Adem, (2011), Bank Specific and Macroeconomic Determinants of Commercial Bank Profitability: Empirical Evidence from Turkeyâ€, Business and Economics Research Journal, Volume 2, Number 2, 2011, pp. 139-152, ISSN: 1309-2448.

- Bashir, Abdel-Hameed M., (2001), Assessing the Performance of Islamic Banks: Some Evidence from the Middle Eastâ€, eCOMMONS, Topics in Middle Eastern and North African Economies, Loyola University, Chicago Loyola eCOMMONS, Quinlan School of Business, Grambling State of Business.

- Frederick, Nsambu K., (2014), Factors Affecting Performance of Commercial Banks in Uganda A Case for Domestic Commercial Banksâ€, Proceedings of 25th International Business Research Conference, 13 - 14 January, 2014, Taj Hotel, Cape Town, South Africa, and ISBN: 978-1-922069-42-9

- Khan, Faisal; Anuar, Melati; Choo, Lim; Khan, Hashim, (2011), Determinants of Bank Profitability in Pakistan: A Case Study of Pakistani Banking Sectorâ€, World Applied Sciences Journal, 15 (10): 1484-1493, 2011, ISSN 1818-4952, © IDOSI Publications, 2011.

- Khrawish, Husni; Al-Sa'di, Noor, The Impact of E-Banking on Bank Profitability: Evidence from Jordanâ€, Middle Eastern Finance and Economics, ISSN: 1450-2889 Issue 13 (2011), © EuroJournals Publishing, Inc. 2011,

- Matthew, Ntow – Gyamfi; Esther, Laryea Afoley, (2012), A Financial Performance Comparison of Foreign VS Local Banks in Ghanaâ€, International Journal of Business and Social Science, Vol. 3 No. 21; November.

- Raza, Ali; Farhan, Muhammad; Akram, Muhammad, (2011), A Comparison of Financial Performance in Investment Banking Sector in Pakistanâ€, International Journal of Business and Social Science, Vol. 2 No. 9 [Special Issue - May 2011]

- Roman, Angela; DănuleÅ£iu, Adina Elena, (2013), An Empirical Analysis of the Determinants of Bank Profitability in Romaniaâ€, Annales Universitatis Apulensis Series Oeconomica, 15(2), 580-593.

- Amman Stock Exchange

- The World Bank



How to Cite

MALAHIMM, S. S. M., & AL KHATIB, A. Y. (2018). Determinants of Financial Performance for the Banks Sector in Jordan. Innovare Journal of Business Management, 6(1), 13–19. Retrieved from



Original Article(s)