This paper reports evidence to support the insight that the impaired financing problem is highly likely connected to low staff efficiency in MENA country Islamic banks. Several macro and micro factors widely used in banking research are used along the measure of staff efficiency as the intervening factor to identify banking performance under impaired financing conditions. It is reasonable to assume that if staff do not work efficiently (for example for lack of skill), bank performance ought to be seriously affected; hence, staff efficiency would have a moderating effect when this factor is added to eight bank-specific factors. Impaired financing to total financing, as a ratio, is a proxy for impaired financing condition. Financial data are accessed for 22 banks from MENA countries covering the recent nine years to 2013. Applying a random effect model, we identify seven factors as significant contributors to performance. Next, by applying a hierarchical regression model, our tests reveal staff efficiency is a significant moderating factor. The result provides statistical support for the Resource-Based Theory, which suggests banks could reduce their impaired financing significantly by increasing staff efficiency. This is a new and significant finding on the linkage of finance with staff efficiency as a factor.