Financial Performance of Banks in Lebanon: Conventional vs Islamic

Boutheina Hashem and Hiyam Sujud ()
Authors registered in the RePEc Author Service: Boutheina Hachem

International Business Research, 2019, vol. 12, issue 2, 40-51

Abstract: This study compares the performance of Islamic and conventional banking in Lebanon in terms of Return on Assets and Return on Equity over the period 2012-2016. Moreover, it examines whether the internal characteristics of the bank may explain the difference in profitability between two types of banking transactions. In addition, the results of the study are analyzed using a regression analysis applied to a sample of both Islamic and conventional banks to investigate the effects of these variables on bank performance. Furthermore, results show that Islamic banks in Lebanon have better asset adequacy compared to conventional banks. However, conventional banks are better in liquidity and are on an average more profitable than Islamic ones. It is worthy to indicate that the Islamic banking industry in Lebanon is still in its infancy and only very few of the banks were active in this sector.

Keywords: conventional banks; Islamic banks; profitability indicators; ROA; ROE (search for similar items in EconPapers)
JEL-codes: C33 F31 F41 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ibrjnl:v:12:y:2019:i:2:p:40-51

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