Assessing the Financial Impact of Mergers on Islamic Banks: A Case Study of Sustainable Finance and Maqasid Approach

Abstract

Bank mergers and acquisitions (M&A) have been on the rise globally, particularly in emerging economies where policies aimed at enhancing financial system stability have been driving restructuring in the banking sector. Qatar's M&A market, while comparatively new, has distinct characteristics. A recent study aimed to determine the impact of M&A activity on the financial performance of Barwa Bank (later Dukhan Bank) in Qatar over six years from 2017-2022, covering three years before and three years post-merger. The study found that the bank's liquidity, profitability, solvency, and investment ratios did not vary significantly, suggesting that M&A activity did not significantly affect the bank’s financial performance. Despite these findings, the study provides recommendations for future research and implications for theory and practice in this area. The results are discussed in the light of SDGs and Maqasid al Shariah, and which goals this merger support the most are analyzed. The paper’s discussion is expected to be a guideline for future mergers to be more sustainable toward 2030 goals.

Enerji Belirsizliği ve Enerji Sektörü Getirileri İlişkisi

“…While their adherence to Shariah principles and emphasis on ethical practices contribute to their stability, there are certain characteristics unique to Islamic banking, such as profit and loss sharing and liquidity management challenges, that need to be effectively managed (Al-Binali, 2023).…”