The Impact of Covid-19 Pandemic on the Organisational Profitability of the Banking Sector in the Kingdom of Bahrain

Abstract

This study aimed to determine the impact of the Coronavirus on the profitability of banks in the Kingdom of Bahrain - a case study on the NationalBank of Bahrain, Bank of Bahrain and Kuwait, and the Ahli United Bank, and an attempt to come up with recommendations. The study will beadministered by collecting data from the annual reports of the banks, as the population and sample of the study consist of NBB, BBK, and AUB Banks.The study lies in knowing the effects of Corona on the profitability of NBB, BBK and AUB banks in Bahrain by comparing previous annual reportsand analyzing the profitability ratio of banks before the Corona period and during the Corona period. The result of study shows that the Corona virusnegatively affects the profitability of banks in the Kingdom of Bahrain. The study notices through the results the extent of the impact of the Coronavirus on the profitability of banks through the sudden closure, and thus we see the extent of the banks' failure to achieve profitability through the markeddecrease in the rate of returns. Hence, the study recommends that in order for banks to increase their profitability, they must increase the effectivenessof the required reserve as a tool to control bank risks, and work on controls and determinants such as capital adequacy, legal liquidity ratio and the ratioof loans to deposits, which are much more effective than reserve requirements in maintaining the safety of the sector and its durability and its ability toabsorb shocks.