The Impact of Banking Mergers on Economic Development in Palestine

Abstract

This study aims to assess the impact of banking mergers on economic development in Palestine by analyzing two key merger cases: Cairo Amman Bank – Islamic Banking Branch and Al-Aqsa Islamic Bank with the Palestinian Islamic Bank. Using a descriptive-analytical approach, the study evaluates financial statements before and after the mergers, analyzes changes in financial indicators, sectoral financing distributions, and financing instruments. The findings reveal that the mergers significantly improved the Palestinian Islamic Bank’s asset base, deposit volume, and profitability. Furthermore, the mergers enhanced its role in financing key economic sectors such as domestic trade, real estate, and agriculture. These improvements strengthened the bank’s financial solvency and competitiveness, positively contributing to economic development efforts. The study recommends encouraging well-regulated and Sharia-compliant mergers among Islamic banks to achieve sustainable banking integration. The originality lies in providing a comprehensive empirical evaluation of two major Islamic banking mergers in Palestine, offering insights and a practical model for banks and policymakers considering mergers as a strategy to overcome sectoral challenges.