Determinants of Off-Balance Sheet Business in the Case of GCC Banking Sectors during Covid-19

Abstract

A Master of Science in Accounting (MSA) by Mohamad Jomaa entitled, “Determinants of Off-Balance Sheet Business in the Case of GCC Banking Sectors during Covid-19”, submitted in August 2025. Thesis advisor is Dr. Abed Al-Nasser Abdallah. Soft copy is available (Thesis, Approval Signatures, Completion Certificate, and AUS Archives Consent Form).This study investigates the factors driving the use of off-balance sheet instruments’ usage among banks in the Gulf Cooperation Council during the Coronavirus Disease 2019. It aims to determine how macroeconomic conditions and growing credit risk influenced these banks' reliance on off-balance sheet instruments. Additionally, it explores how variations in off-balance sheet usage varied across banks based on institutional characteristics, such as bank size and profitability before, during, and after the pandemic. Lastly, the study aims to highlight the implications of increased off-balance sheet activity for financial stability and regulatory oversight during crisis periods, as indicated by the capital adequacy and loan ratios. The study used a sample of 79 banks from the Gulf Cooperation Council and employed a multiple regression model to identify the significant drivers of off-balance sheet activity. A Wilcoxon test finds no significant change in off-balance sheet activity over the three periods. However, regression models for the respective periods find bank size as the most significant determinant of off-balance sheet usage across all years, while loan ratio negatively impacted off-balance sheet activity. Profitability and liquidity exhibited weaker and largely insignificant effects. These findings underscore the role of institutional characteristics in shaping off-balance sheet activity, presenting valuable insights for policymakers and bank management in times of crisis.School of Business AdministrationDepartment of Accounting and Information SystemsMaster of Science in Accounting (MSA