Vol. 21, N°1 (2026)

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The Latent Dimensions of Bank Performance in the MENA Region: A Principal Component Approach to Islamic and Conventional Banks

Résumé

This study examines the latent dimensions of bank performance in the MENA region during the period 2010–2025 using Principal Component Analysis (PCA) for Islamic and conventional banks. The analysis is based on an unbalanced panel of 1,062 bank-year observations covering 62 banks in nine countries and twenty balance-sheet, macroeconomic, and ESG variables. The empirical results reveal a highly concentrated factor structure dominated by a macroeconomic and institutional component, explaining 73.9% of the variance for Islamic banks and 84.3% for conventional banks. More precisely, Islamic banks exhibit a distinct organization of leverage and capitalization, whereas conventional banks display a debt–equity trade-off. Structural break tests also identify the COVID-19 pandemic as the major breakpoint, with a stronger impact on conventional banks. These findings provide valuable insights for regulators and policymakers seeking to strengthen the resilience of the banking sector in the MENA region.

Comment citer cet article

Fatma Derbali & Fatma Ben Braiek (2026), " The Latent Dimensions of Bank Performance in the MENA Region: A Principal Component Approach to Islamic and Conventional Banks ", International Journal of Management And Technologies, Vol.21, N°1, pp: 99-121. http://www.ijmat.tn/pages/articles/30/185