COVID-19 and its impact on the financial and operational performance of the Palestinian Banks رسالة ماجستير

Abstract

The Palestinian banking sector plays a vital role in the economic growth, the good financial well-being of a banking sector is important for owners, investors, personnel, and the whole economy as well. Recently, the whole world was affected by a coronavirus and it caused economic consequences, and the Palestinian economy is part of this global economy, it had registered a sharp decline of up to 12% during 2020 ( PMA, Dec2020). The banking sector plays a vital role in the economic development and prosperity of the country, so the research aimed to measure COVID-19's impact on the operating and financial performance of local Palestinian Banks. Through this research, the performance of six Palestinian banks has been evaluated using the CAMEL model rating system, and the data has been collected for the past four years i.e. 2017-2020, the sample consisted of all local commercial Palestinian banks and two Islamic banks. CAMEL model consists of five critical indicators that assess the soundness and execution of the bank. These segments are Capital adequacy, Asset quality, Management, Earnings, and Liquidity. The researcher used descriptive analysis and comparison approaches to identify the impact of the pandemic on the banks’ performance. The research concluded that Palestinian banks performed well even during the pandemic, they are committed to the Basel Accords and international standards in having capital adequacy of 10%, and some banks had a high level of capital adequacy, so they had to apply the capital in a profit-generating manner, on the other hand, profitability was not satisfied in all banks. The researcher recommended sustainable investing and monitored risk management practices to increase profits.