Impact of Covid-19 on Profitability of Banks in UAE and France: Trends, Issues and Determinants

The Covid-19 pandemic had a major impact on the profitability of banking industry and has
resulted in the decline of many economic activities across the globe. This research paper attempts
to examine the impact of the pandemic on the profitability of the banks within the UAE and France.
The lack of research in this area spurs curiosity and begs for further investigation to understand
the extent of the possible impact on banks’ profitability. A comparative assessment of profitability
model has been examined to explain the cross-section of banks profitability in relation to the bank
specific variables. Panel data models such as fixed effect model and Random effect model have
been used to observe the bank specific effect. `The results shows that bank specific factors
including total assets, loan loss provision, non-interest income, capital ratio, efficiency ratio have
an impact on profitability indicators of banks in UAE and France. Impact of pandemic on bank
profitability is higher in France compared to UAE suggesting that Banks in UAE are more resilient
in managing external economic shocks.