A comparative analysis of financial performance of Islamic banks vis-à-vis conventional banks: evidence from Pakistan

IF 2.8 Q2 BUSINESS, FINANCE

ISRA International Journal of Islamic Finance Pub Date : 2021-07-29 DOI:10.1108/ijif-08-2018-0093

M. Majeed, Abida Zainab

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引用次数: 22

Abstract

PurposeIn recent years, the fast growth of Islamic banks (IBs) has generated debates among policymakers and economists about the sustainability and performance of these institutions. This paper aims to undertake a comparative analysis of the financial performance of IBs and conventional banks (CBs) in Pakistan over the period 2008–2019 to evaluate how IBs are faring compared to their conventional peers.Design/methodology/approachThis paper considers financial ratio analysis (FRA) to analyze and compare the performance of the top-10 IBs and CBs operating in Pakistan. The sample includes five full-fledged IBs and five CBs which offer Islamic windows in Pakistan. We have selected the top-5 best performing CBs offering Islamic windows. This study offers a comparative analysis of Islamic v/s conventional banks.FindingsThe results show that Islamic banks are better capitalized, less risky and have higher liquidity. In contrast, the profit of Islamic banks is found lower than CBs. The logical reasoning behind these performance indicators has been discussed in detail.Research limitations/implicationsThe study has provided an analysis of financial performance only for Pakistan. A cross-country analysis could be more representative of the performance of Islamic Banks.Practical implicationsThe size of Islamic banking industry should be enhanced by opening new branches and promoting Islamic finance literacy.Originality/valueThe study assists investors, borrowers and managers in making better decisions. It also provides the latest valuable information to regulators and policymakers in making rules and policies for the financial industry in Pakistan.

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伊斯兰银行与传统银行财务业绩的比较分析：来自巴基斯坦的证据

近年来，伊斯兰银行(ib)的快速增长引发了政策制定者和经济学家对这些机构的可持续性和绩效的争论。本文旨在对巴基斯坦2008-2019年期间ib和传统银行(cb)的财务绩效进行比较分析，以评估ib与传统同行相比的表现。设计/方法/方法本文采用财务比率分析(FRA)来分析和比较在巴基斯坦经营的前10名ib和cb的业绩。样本包括五个成熟的ib和五个cb，它们在巴基斯坦提供伊斯兰窗口。我们选择了前5名提供伊斯兰窗口的表现最好的哥伦比亚广播公司。本研究对伊斯兰传统银行进行了比较分析。研究结果表明，伊斯兰银行资本状况较好，风险较低，流动性较高。相反，伊斯兰银行的利润低于商业银行。详细讨论了这些性能指标背后的逻辑推理。研究的局限性/意义本研究仅对巴基斯坦的财务绩效进行了分析。跨国分析可能更能代表伊斯兰银行的表现。实践启示应通过开设新分行和推广伊斯兰金融知识来扩大伊斯兰银行业的规模。独创性/价值这项研究有助于投资者、借款人和管理者做出更好的决策。它还为监管机构和政策制定者制定巴基斯坦金融业的规则和政策提供了最新的有价值的信息。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

ISRA International Journal of Islamic Finance BUSINESS, FINANCE-

CiteScore

3.40

自引率

17.40%

发文量

审稿时长

20 weeks

期刊介绍： It is the aspiration of the editorial committee that IJIF achieves the highest rank in quality and substance. It is thus our aim that the journal be carried in the Thompson Reuters’ ISI and Scopus databases. By ensuring high standards in articles published in Islamic finance we ensure that further innovation and research is carried out and promoted in the Islamic finance industry and academia. IJIF publishes 2 issues per annum.