Financial performance of islamic and conventional banking in pakistan: a comparative study

Author: 
Zubair Ahmad., Muhammad Nazam., Asif Maqbool and Adnan Adeel

Islamic banking in Pakistan started in 1980s resulted into many changes in the banking company’s ordinance 1962. Islamic banking is considering as an alternative of conventional banking. The purpose of this comparative study is to measure and analyse the financial performance of four conventional and four Islamic banks working in Pakistan during period of 2011-2015 over 5 years. Financial performance comparison of both banking systems was conducted by using twelve financial ratios under category of profitability, liquidity, risk and solvency, and efficiency. For calculating twelve financial ratios in MS Excel, financial data is taken from annual reports of Islamic and conventional banks. One-way ANOVA was used in this study to test the hypothesis and to check the mean differences significance among banks. The comparative study concluded that Islamic banks are less profitable, more liquid, less risky, more solvent and more efficient as compared to conventional banks.

Download PDF: 
Business Management Sciences
Volume: 
Volume5
Issue: 
6
Year of Publication: 
2017
How to Cite this article: 

Zubair Ahmad et al., 2017, Financial performance of islamic and conventional banking in pakistan: a comparative study, International Journal of Current Science and Technology, Vol.5, Issue, 6, pp. 442-450