Do Islamic Banks Perform Better than Conventional Banks?
This study aims to compare the performance of Islamic and conventional banks in Pakistan for the period 2007-2016. For the purpose, the study first employs CAMELS composite rating to find the ratios to highlight the managerial and financial performance of the banks. The study then uses logistic regr...
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| Format: | Article |
| Language: | English |
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İLKE İlim Kültür Eğitim Vakfı
2021-02-01
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| Series: | Türkiye İslam İktisadı Dergisi |
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| Online Access: | https://tujise.org/content/6-issues/15-8-1/a082/tujise-8.1-082.pdf |
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| _version_ | 1832544734745198592 |
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| author | Asif Ali Malik Fahim Bashir Muhammad Asim Afridi |
| author_facet | Asif Ali Malik Fahim Bashir Muhammad Asim Afridi |
| author_sort | Asif Ali |
| collection | DOAJ |
| description | This study aims to compare the performance of Islamic and conventional banks in Pakistan for the period 2007-2016. For the purpose, the study first employs CAMELS composite rating to find the ratios to highlight the managerial and financial performance of the banks. The study then uses logistic regression technique for the performance comparison of Islamic and Conventional banks. The composite rating results reveal that both Islamic and conventional banks fall in rank 3 and need help from regulatory authorities to improve the performance of banking sector in Pakistan. Furthermore, the logistic regression results reveal that Islamic banks perform well in asset quality, management adequacy and sensitivity to market risk whereas conventional banks are efficient in capital adequacy and liquidity. Robustness of results is achieved by performance comparison of the same size Islamic and conventional banks. This analysis is important because Pakistan’s banking sector is hybrid where both Islamic and conventional banks work in the same environment and under the same regulator. Findings of this study are not only useful for Islamic and conventional banks operating in Pakistan but would also help the policymakers in devising future policies. |
| format | Article |
| id | doaj-art-1ccb871d09cf48ffb27dc58e507826ca |
| institution | Kabale University |
| issn | 2148-3809 |
| language | English |
| publishDate | 2021-02-01 |
| publisher | İLKE İlim Kültür Eğitim Vakfı |
| record_format | Article |
| series | Türkiye İslam İktisadı Dergisi |
| spelling | doaj-art-1ccb871d09cf48ffb27dc58e507826ca2025-02-03T09:56:50ZengİLKE İlim Kültür Eğitim VakfıTürkiye İslam İktisadı Dergisi2148-38092021-02-018111710.26414/A082Do Islamic Banks Perform Better than Conventional Banks?Asif Ali0https://orcid.org/0000-0002-7998-6962Malik Fahim Bashir 1https://orcid.org/0000-0002-6324-6855Muhammad Asim Afridi2https://orcid.org/0000-0002-4061-9989COMSATS University IslamabadCOMSATS University IslamabadCOMSATS University IslamabadThis study aims to compare the performance of Islamic and conventional banks in Pakistan for the period 2007-2016. For the purpose, the study first employs CAMELS composite rating to find the ratios to highlight the managerial and financial performance of the banks. The study then uses logistic regression technique for the performance comparison of Islamic and Conventional banks. The composite rating results reveal that both Islamic and conventional banks fall in rank 3 and need help from regulatory authorities to improve the performance of banking sector in Pakistan. Furthermore, the logistic regression results reveal that Islamic banks perform well in asset quality, management adequacy and sensitivity to market risk whereas conventional banks are efficient in capital adequacy and liquidity. Robustness of results is achieved by performance comparison of the same size Islamic and conventional banks. This analysis is important because Pakistan’s banking sector is hybrid where both Islamic and conventional banks work in the same environment and under the same regulator. Findings of this study are not only useful for Islamic and conventional banks operating in Pakistan but would also help the policymakers in devising future policies.https://tujise.org/content/6-issues/15-8-1/a082/tujise-8.1-082.pdfislamic bankingconventional bankingfinancial ratiosfinancial performancelogistic regressioncamels modelaggregate composite ranking |
| spellingShingle | Asif Ali Malik Fahim Bashir Muhammad Asim Afridi Do Islamic Banks Perform Better than Conventional Banks? Türkiye İslam İktisadı Dergisi islamic banking conventional banking financial ratios financial performance logistic regression camels model aggregate composite ranking |
| title | Do Islamic Banks Perform Better than Conventional Banks? |
| title_full | Do Islamic Banks Perform Better than Conventional Banks? |
| title_fullStr | Do Islamic Banks Perform Better than Conventional Banks? |
| title_full_unstemmed | Do Islamic Banks Perform Better than Conventional Banks? |
| title_short | Do Islamic Banks Perform Better than Conventional Banks? |
| title_sort | do islamic banks perform better than conventional banks |
| topic | islamic banking conventional banking financial ratios financial performance logistic regression camels model aggregate composite ranking |
| url | https://tujise.org/content/6-issues/15-8-1/a082/tujise-8.1-082.pdf |
| work_keys_str_mv | AT asifali doislamicbanksperformbetterthanconventionalbanks AT malikfahimbashir doislamicbanksperformbetterthanconventionalbanks AT muhammadasimafridi doislamicbanksperformbetterthanconventionalbanks |