FINANCIAL PERFORMANCE OF ISLAMIC AND CONVENTIONAL BANKS: EVIDENCE FROM JORDAN

Maysa’a Munir Milhem and Rasha M. S. Istaiteyeh

Global Journal of Business Research, 2015, vol. 9, issue 3, 27-41

Abstract: This article investigates the performance of Islamic banks versus conventional counterparts in Jordan over the period (2009-2013) using financial ratio analysis. A total of 16 banks (13 conventional and 3 Islamic) were considered. A comparative study is undertaken based on performance indicators, 13 financial ratios were estimated to measure performances in terms of profitability, liquidity, risk and solvency, and efficiency. T-test is used in determining their significance. The results show that there are differences in performance between Islamic and conventional banks in Jordan during study period in terms Islamic banks are less profitable, more liquid, less risky, and less efficient comparing to conventional banks. However, there was no significant difference in profitability ratios, but there was a significant difference in liquidity ratios and risk and solvency ratios between conventional and Islamic banks

Keywords: Bank Efficiency; Financial Ratios; Jordan; Islamic Banks; Conventional Banks (search for similar items in EconPapers)
JEL-codes: G21 G23 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (3)

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