Performance of Islamic and Conventional Banks in Pakistan: A Comparative Study

Shahab Aziz, Shahab Aziz, Maizaitulaidawati Md Husin and Shujahat Haider Hashmi
Additional contact information
Shahab Aziz: Credit Manager, Bank of Khyber, Pakistan,
Shahab Aziz: PhD Scholar, University Technology Malaysia (UTM), Malaysia
Maizaitulaidawati Md Husin: International Business School, Universiti Teknologi Malaysia (UTM), Malaysia,
Shujahat Haider Hashmi: Faculty of Management and Social Sciences, Capital University of Science and Technology (CUST), Pakistan

International Journal of Economics and Financial Issues, 2016, vol. 6, issue 4, 1383-1391

Abstract: This study is conducted to find out financial performance of Islamic and conventional banks operating in Pakistan for the year 2006-2014. For comparison purpose five Islamic and five similar sized conventional banks have been selected. The comparison has been made on average values of different ratios of both Islamic and conventional banks. The comparison shows that Islamic banks performance has been better in terms of efficiency, return and asset quality. However Islamic banks are struggling in terms of advances, investment, liquidity, deposits and capital as conventional banks performance is better in these areas. Islamic banks are charging higher spread and share of distributable income to depositors is far less as compared to conventional banks. Islamic banks need to focus on fair distribution of profit to its depositors in order to increase its credibility and help in achieving overall Islamic socio economic objectives of justice and equality. Islamic banks should focus on new products development and innovative solutions to meet client's needs, also Islamic banks needs to strengthen their equity base.

Keywords: Financial Performance; Financial Ratios; Comparison; Islamic Banks; Conventional Banks (search for similar items in EconPapers)
JEL-codes: E44 G21 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.econjournals.com/index.php/ijefi/article/download/2603/pdf (application/pdf)
http://www.econjournals.com/index.php/ijefi/article/view/2603/pdf (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:eco:journ1:2016-04-13

Access Statistics for this article

International Journal of Economics and Financial Issues is currently edited by Ilhan Ozturk

More articles in International Journal of Economics and Financial Issues from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().