The Financial Performance Analysis of Islamic Vs Conventional Banks: An Empirical study on Bangladesh

Mohotarema Rashid

International Journal of Science and Business, 2020, vol. 4, issue 1, 241-252

Abstract: This paper focuses on the comprehensive comparison about the financial performance of conventional and non conventional banks of Bangladesh. The study shows that in spite of a few exceptions in general conventional overall performance was better than the non conventional banks. I have chosen five Islamic banks and five Conventional Banks & analyze different data to find out the effect of CAMEL Factors on Return on Equity. Here I have used different dependent variables to analyze the impact of each variable on Return on Equity. The variables are Capital Adequacy, Asset Quality, Management Quality, Earnings & Liquidity The regression model indicates that Capital adequacy, Asset Quality, have significant negative impact on Return on Equity for conventional bank. This model also indicates Management Quality & Earnings Quality and Liquidity are positively related to Return on Equity and this variable has also significant impact on Return on Equity. I have used this same model for non conventional banks and found that Capital adequacy, Asset Quality and Earnings and Liquidity have negative insignificant impact on Return on Equity & only Management Quality has negative insignificant impact on return on asset. Then In my study I have used descriptive statistics to compare between these two banking system in terms of CAMEL factors. I have found that conventional bank dominates non conventional bank in terms of Capital Adequacy, Asset Quality, Earnings, whereas non conventional bank dominates conventional banks in terms of Management Quality and Liquidity.

Keywords: CAMEL; Conventional Banks; Non Conventional Banks; Performance Analysis (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ijsab.com/wp-content/uploads/459.pdf (application/pdf)
https://ijsab.com/volume-4-issue-1/2760 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aif:journl:v:4:y:2020:i:1:p:241-252

Access Statistics for this article

International Journal of Science and Business is currently edited by Dr. Md Shamim Hossain

More articles in International Journal of Science and Business from IJSAB International
Bibliographic data for series maintained by Farjana Rahman ().