The Impact of Financial Risks on the Profitability of Absolute Investment Account Holders in Jordanian Islamic Banks: The Moderating Role of Market Share

Abstract

This study aimed to test the impact of financial risks on the profitability of absolute investment account holders in Jordanian Islamic banks and the moderating role of market share. The study used a descriptive and analytical approach, relying on data from the Jordanian Central Bank statistics and annual reports of a sample comprising (3) banks for the period between (2012-2021 AD). Financial risks were measured through credit risks, liquidity risks, and capital risks, while market share was treated as a moderating variable. The profitability of absolute investment account holders was measured through deposit returns. The study found variability among Jordanian Islamic banks in the profitability of absolute investment account holders. The results showed no significant impact of financial risks (liquidity risks and credit risks) on the profitability of absolute investment account holders. The impact was confined to capital risks. The study recommended Islamic banks to increase regulatory capital and enhance market share, both in terms of funding sources (deposits) and providing a financing mix suitable for various investment sectors.