A content analysis of narrative COVID-19 disclosure in Omani Islamic banks

The purpose of this chapter is to investigate narrative COVID-19 disclosure in Islamic banks in the Sultanate of Oman. There are two Islamic banks in Oman: Bank Nizwa and Alizz Islamic Bank. We use the content analysis method to count the number of statements related to COVID-19 disclosure in the narrative sections of Islamic banks’ annual reports published in 2020. Our measure of COVID-19 disclosure is based on the special guidance of the International Finance Corporation’s Framework on “Disclosure and Transparency in Crisis – Increasing Resilience and Building Trust during and after COVID-19”. Our analysis provides new evidence that Omani Islamic banks disclose more strategic information related to the COVID-19 pandemic. However, they disclose less performance and governance information related to the pandemic. We also find that bank profitability has not been significantly affected by the pandemic, although both liquidity and risk have been negatively affected. To the best of our knowledge, there is no study, to date, that examines narrative COVID-19 disclosure in Islamic banks. Our study adds to the existing and growing literature on voluntary narrative disclosure in Islamic banks. It offers practical applications, suggesting that guidance is needed to encourage Islamic banks to disclose more governance and performance-related information during the pandemic.Our analysis provides new evidence that Omani Islamic banks disclose more strategic information related to the COVID-19 pandemic. However, they disclose less performance and governance information related to the pandemic. We also find that bank profitability has not been significantly affected by the pandemic, although both liquidity and risk have been negatively affected. To the best of our knowledge, there is no study, to date, that examines narrative COVID-19 disclosure in Islamic Banks. Our study adds to the existing and growing literature on voluntary narrative disclosure in Islamic banks. It offers practical implications. It suggested that guidance is needed to encourage Islamic banks to disclose more governance and performance-related information during the pandemic.