The Impact of Capital Adequacy on the Profitability of Islamic Banks in Algeria “Case study of Al Baraka Bank of Algeria and Al Salam Bank – Algeria” during the period: 2010-2016

Abstract

The objective of this study is to examine the effect of capital adequacy on the profitability of Islamic banks in Algeria. As Al Baraka bank of Algeria and Al Salam bank –Algeria are the only Islamic banks, so we choose it as sample for the study during the period 2010-2016, The study problem was treated using Linear regression models and then testing the hypotheses of the method of the lower squares, The main results of the applied study indicate the following:

-The ratio of equity to total deposits affects on ROE negatively by 44.21;

-The ratio of equity to total deposits affects on ROA positively by 32.87.