The International Conference on Investment and Financial Markets 2019 was held at the Dubai International Financial Centre (DIFC) under the heading “Leveraging Knowledge in Financial Markets to Grow Personal Wealth.” The object of the conference was to highlight investment opportunities and financial obstacles in the Gulf region, and to give investors and decision-makers closer look at the opportunities and challenges faced by the financial markets.
Interim Dean at the Faculty of Business Administration and Economics (FBAE) at Notre Dame University-Louaize (NDU) and Professor of Finance, Dr. Viviane Naimy, presented the findings of a working paper, jointly written with Ruba Kattan, Senior Credit Risk Analyst at National Commercial Bank, about the impact of the recent oil price decline on the GCC banking system for the period 2011-2017. An econometric model was used to test structural breaks in the performance of a selected sample from GCC, Saudi, UAE, and Qatar banks upon the occurrence of the recent oil price decline at the various aspects of bank performance: profitability, liquidity, credit quality, and capitalization.
The paper’s conclusion was that while Qatar banks were found to be resilient showing continuous performance over time, the Saudi and UAE banks were significantly influenced by the decline, experiencing negative structural breaks at the credit quality level, but positive breaks at the capitalization level. However, UAE banks were found to have also experienced negative breaks at the profitability level. The study provided GCC bank authorities with valuable insights about what bank aspects could be negatively impacted in the event of negative oil price shocks, and what aspects could help mitigate the effect, which helps them introduce necessary changes and preventive actions to better absorb future shocks.
Such presentations help maintain NDU’s academic integrity, by providing impactful research on regional level as much as local one.