scholarly journals Financial performance of conventional and Islamic banks in Bahrain: a comparative study

2019 ◽  
Vol 14 (4) ◽  
pp. 192-205 ◽  
Author(s):  
Sayel Ramadhan ◽  
Mohammad Selim ◽  
Ahmad Sahwan
Keyword(s):  
Comparative Study ◽  
Financial Performance ◽  
Islamic Banks ◽  
Return On Equity ◽  
Financial Ratio ◽  
Financial Ratio Analysis ◽  
Risk Cost ◽  
Conventional Banks ◽  
Asset Size ◽  
The Relationship

The main purpose of this study is to identify the variables that influence the financial performance of both types of banks, Islamic and conventional, and compare their financial performance over the period of 2003–2016. Banks listed on the Bahrain Bourse as of December 31, 2016 were used in the study, with a total of seven banks, of which three are Islamic and four are conventional. To make an appropriate comparative study, financial ratio analysis is used. Multiple regression and paired sample t-test are used to analyze the data. Return on assets (ROA) and return on equity (ROE) are considered as the basis for measuring financial performance and are set as dependent variables. The analysis of the results shows that conventional banks perform better than Islamic banks in terms of profitability. The results also show that ROA is significantly related to risk, cost of intermediation and efficiency ratios, while ROE is highly influenced by risk ratios only. Moreover, it was found out that the relationship between asset size and the performance of banks is insignificant, while the relationship between the number of branches and both ROA and ROE is significant.

scholarly journals A comparative analysis of financial performance of Islamic banks vis-à-vis conventional banks: evidence from Pakistan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Tariq Majeed ◽  
Abida Zainab
Keyword(s):  
Comparative Analysis ◽  
Financial Performance ◽  
Islamic Banks ◽  
Financial Industry ◽  
Content Type ◽  
Financial Ratio ◽  
Financial Ratio Analysis ◽  
Country Analysis ◽  
And Performance ◽  
Conventional Banks

PurposeIn recent years, the fast growth of Islamic banks (IBs) has generated debates among policymakers and economists about the sustainability and performance of these institutions. This paper aims to undertake a comparative analysis of the financial performance of IBs and conventional banks (CBs) in Pakistan over the period 2008–2019 to evaluate how IBs are faring compared to their conventional peers.Design/methodology/approachThis paper considers financial ratio analysis (FRA) to analyze and compare the performance of the top-10 IBs and CBs operating in Pakistan. The sample includes five full-fledged IBs and five CBs which offer Islamic windows in Pakistan. We have selected the top-5 best performing CBs offering Islamic windows. This study offers a comparative analysis of Islamic v/s conventional banks.FindingsThe results show that Islamic banks are better capitalized, less risky and have higher liquidity. In contrast, the profit of Islamic banks is found lower than CBs. The logical reasoning behind these performance indicators has been discussed in detail.Research limitations/implicationsThe study has provided an analysis of financial performance only for Pakistan. A cross-country analysis could be more representative of the performance of Islamic Banks.Practical implicationsThe size of Islamic banking industry should be enhanced by opening new branches and promoting Islamic finance literacy.Originality/valueThe study assists investors, borrowers and managers in making better decisions. It also provides the latest valuable information to regulators and policymakers in making rules and policies for the financial industry in Pakistan.

scholarly journals ANALISIS PERBANDINGAN KINERJA KEUANGAN BANK UMUM KONVENSIONAL DAN BANK SYARIAH ( STUDI 3 BUAH BANK UMUM KONVENSIONAL DAN 3 BUAH BANK UMUM SYARIAH )

2019 ◽  
Author(s):  
Irfan Azwar
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Quantitative Research ◽  
Sample Selection ◽  
Financial Ratios ◽  
Islamic Banks ◽  
Test Analysis ◽  
Financial Ratio ◽  
Financial Ratio Analysis ◽  
Conventional Banks

This study aims to compare the financial performance of conventional commercial banks with sharia commercial banks in Indonesia in the period 2012-2016 using financial ratios. The financial ratios used consist of CAR, NPL, ROA, BOPO and LDR. The type of research used in this study is quantitative research. The data used in this study are data of bank financial statements for 2012 to 2016 obtained through several websites from the bank concerned. The sampling method used was purposive sampling, based on the sample selection criteria, obtained a sample of 6 banks, 3 banks for Islamic commercial banks and 3 banks for conventional commercial banks. Data analysis techniques used to compare the performance of conventional commercial banks with Islamic commercial banks are normality test and independent sample t-test. Analysis shows that there are significant differences between the financial performance of conventional banks and Islamic banks. Based on the comparison of financial ratio analysis, conventional bank financial performance is better in terms of CAR, NPL, ROA and BOPO ratios, while the financial performance of Islamic banks is better in terms of LDR ratio

scholarly journals MENINJAU KINERJA BANK SYARIAH DI INDONESIA

2020 ◽  
Vol 3 (1) ◽  
pp. 31-40
Author(s):  
Fitri Sagantha
Keyword(s):  
Regression Analysis ◽  
Financial Performance ◽  
Financial Statements ◽  
Quantitative Approach ◽  
Financial Ratios ◽  
Islamic Banks ◽  
Economic Stability ◽  
Financial Ratio ◽  
Significant Stage ◽  
Conventional Banks

To show the role, then show the performance. Maybe, the term is right for the bank. The existence of banks influences economic stability, therefore financial performance must be good. There is no choice but to increase the entire financial ratio. Interest in reviewing the financial ratios of banks, especially Islamic banks, is the goal to be achieved in this study. Use financial statements as data, and analyze the extent of their performance and influence. For this reason, a quantitative approach and regression analysis are needed. So that research results can be explained properly. The findings in this study suggest that the performance of Islamic banks is relative. Its role is not yet at a significant stage for the economy, and it is still far from conventional banks

scholarly journals A Technical Recitation on Efficiency of Islamic and Traditional Banking System in Kingdom of Bahrain

2019 ◽  
Vol 8 (10) ◽  
pp. 4424-4431
Keyword(s):  
Banking System ◽  
Vital Role ◽  
Return On Assets ◽  
Return On Equity ◽  
Financial Ratio ◽  
Financial Ratio Analysis ◽  
Conventional Banks ◽  
The One ◽  
Financial Transactions ◽  
Revenue Efficiency

Banking industry plays a vital role in the for economic development of a country. This research aims at identifying which banking regime proves to be more efficient and its significance using Financial Ratio Analysis (FRA), composed of cost efficiency, revenue efficiency and profit efficiency ratios along with the One-way ANOVA test. The traditional banking system governs the financial sector by dealing with the majority of financial transactions of a country and the existence of Islamic and conventional banks has contributed for the development of the economy. The present study focuses on the comparative analysis of financial performance of Islamic and traditional banks in terms of cost and income in Bahrain. The study uses financial tools like profitability, liquidity and solvency, commitment to economy and community, efficiency and productivity of both streams of banks. The findings indicate that the traditional banking system is superior in terms of cost, revenue and profit efficiencies, furthermore, the results of the multiple regression analysis on the banks’ return on assets and return on equity imply that the efficiency of Islamic banks have more influence on their profitability compared to their traditional counterparts. Inflation had minimal effect on the efficiency of both banking system.

Are Islamic Banks Really More Solvent Than Conventional Banks in a Financially Stable Period?

2019 ◽  
Vol 9 (11) ◽  
pp. 346-366
Author(s):  
Achraf Haddad ◽  
Anis El Ammari ◽  
Abdelfettah Bouri
Keyword(s):  
Stock Exchanges ◽  
Islamic Banks ◽  
Financial Ratio ◽  
Stable Period ◽  
Financial Ratio Analysis ◽  
Two Samples ◽  
Operative Evaluation ◽  
Conventional Banks ◽  
The Comparative Study ◽  
Conventional And Islamic Banks

The knowledge value produced by this research was established in particular by the methodological challenges of the comparative study. Based on a process of bibliographic research, available conditional observation and the using of the Financial Ratio Analysis Method, the objective of this article is to solve the ambiguity of previous comparative research and innovated an equiprobable comparison between the solvencies of conventional and Islamic banks over the period (2010-2018). Our study is not only a matter of dealing generically with the financial solvency of conventional and Islamic banks but also, we analyzed the inherent implications that may alter the results of a banks’ operative evaluation. Two samples were taken from two reference populations existing in the selected countries. The choice of banks is limited to countries whose banking systems incorporate both Islamic and conventional banks. Subsequently, each list bank was reduced based on qualitative and quantitative filtering criteria. Therefore, each conventional bank has its closest Islamic equivalence. This restriction reduced the sample size to 63 banks each. The selected banks are all large and listed in different stock exchanges. In conclusion, we found that conventional banks are more solvent than Islamic banks during a financial stable period.

scholarly journals Conducting Business with God: Is God Blessing Islamic Banks with Better Financial Performance than Conventional Banks?

2019 ◽  
Vol 6 (2) ◽  
pp. 40
Author(s):  
Musaed S. Alali
Keyword(s):  
Financial Performance ◽  
Financial Analysis ◽  
Stock Exchange ◽  
The Other ◽  
Islamic Banks ◽  
Return On Assets ◽  
Return On Equity ◽  
Significant Difference ◽  
Kuwait Stock Exchange ◽  
Conventional Banks

This study aims to compare the financial performance between Islamic and conventional banks listed at Kuwait stock exchange over the period 2011-2018 using the modified DuPont model of financial analysis which is based on the analysis of return on equity (ROE). Unlike previous studies where researchers compared the performance on a bank-to-bank basis, this study examines the aggregate ratios of Islamic banks and compare it to aggregate ratios of conventional banks. The study also adds volatility into the model since consistency in returns indicated a more stable sector.  Results obtained from this study showed that conventional banks in Kuwait had a better mean performance during the study period in terms of both return on assets (ROA) and return in equity (ROE), Islamic banks also showed a higher deviation in these two ratios resulting in a lower Sharpe ratio. While the results showed no statistically significant mean difference between Islamic and conventional banks in terms of return on assets (ROA), the results also showed a statistically significant difference in mean return on equity (ROE) between the two sub-sectors.  On the other hand, Islamic banks showed an impressive improvement in their ratios during the last three years of the study period which impose a real threat to conventional banks in the future.

scholarly journals A Comparative Study of Islamic and Conventional Banking in Bangladesh: Camel Analysis

2016 ◽  
Vol 10 (1) ◽  
pp. 73-91 ◽  
Author(s):  
Md Tanim Ul Islam ◽  
Mohammad Ashrafuzzaman
Keyword(s):  
Comparative Study ◽  
Financial Performance ◽  
Financial Statements ◽  
T Test ◽  
Capital Adequacy ◽  
Islamic Banks ◽  
Management Capability ◽  
Significant Difference ◽  
Conventional Banks

The aims of this study are to evaluate the financial performance of Islamic and conventional banks of Bangladesh through CAMEL test during the period of 2009 to 2013. The study tries and to determine whether there are significant differences between the two categories of banks for each of the ratios used in CAMEL test. A sample of five listed conventional banks and five listed Islamic banks were selected to study the objectives. The data used in this study were compiled from the financial statements of the respective sample banks. To make substantial noteworthy results, t-test(independent sample) is used. This paper found no significant difference between the Islamic banks and conventional banks regarding capital adequacy, management capability and earnings but found a significant difference regarding asset quality.Journal of Business and Technology (Dhaka) Vol.10(1) 2015; 73-91

scholarly journals The Impact of Financial Performance on Corporate Social Responsibility: An Empirical Analysis of Conventional and Islamic Banks of Pakistan

2018 ◽  
Vol 2 (2) ◽  
pp. 01-18
Author(s):  
Ummara Fatima ◽  
Uzma Bashir
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Banking Sector ◽  
Annual Reports ◽  
Islamic Banks ◽  
Conventional Banks ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

The study explores how financial performance (FP) affects the corporate social responsibility (CSR) of the banking sector of Pakistan. Further, it also elaborates the comparison between FP and CSR of Islamic and conventional banks of Pakistan. The study is based on the annual reports of banks listed at Pakistan Stock Exchange (PSE) for the years 2010-2016. The study used several panel data diagnostic tests and three regression models to check the relationship between FP and CSR of Islamic and conventional banks of Pakistan, while taking leverage and size as control variables. The results indicate that in case of conventional banks the relationship between ROE and CSR is negative. Here, the results are consistent with the agency theory which states that investment in CSR related activities is a waste of resources. While return on asset (ROA) is depicting negative and insignificant relationship with CSR, which depicts that FP does not have any impact on the investment in CSR initiatives. In the case of Islamic banks, the relationship between return on equity (ROE) and CSR is positive and significant. Here, the results support social contract and stakeholder theories. The research has important practical consequences that will help the banking industry managers to adopt optimal investment strategies about CSR related activities. The study provides guidelines to conventional banks to invest more in CSR in the same way Islamic banks are doing. The findings of the study lay some foundations upon which a more detailed analysis of CSR of banks could be based.

scholarly journals Measuring risk and efficiency for some Islamic banks in Kuwait: قياس المخاطر والكفاءة لبعض البنوك الإسلامية في الكويت

2017 ◽  
Vol 3 (2) ◽  
Author(s):  
Widad Fahd Al-mudif
Keyword(s):  
Credit Risk ◽  
Operational Risk ◽  
Operational Efficiency ◽  
Second Phase ◽  
Islamic Banks ◽  
Financial Ratio ◽  
Financial Ratio Analysis ◽  
Third Stage ◽  
Three Stages ◽  
The Relationship

This study measures risk and efficiency in selected sample of Islamic banks in Kuwait using financial ratio analysis during the period (2010-2014) in order to find relationship between risk and operation efficiency in the mentioned sample. We used three stages of analysis in this paper, first phase included the measurement of the efficiency of these banks through the financial ratios related to operational efficiency analysis, while the second phase involves the analysis of credit risk ratios, liquidity and operational risk, and in the third stage I studied the relationship between these risks and its impact on the financial and operational efficiency. It has been introduced analytical tables showing the relationship between efficiency and risk of four Islamic banks in Kuwait. The overall results of this paper was that the operational efficiency of these banks are affected directly proportional to credit risk, and inversely to liquidity risk, while there is no clear relationship between operational efficiency and operational risk

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