Abstract
This paper evaluates and compares the performance of Sharia-compliant banks with
their conventional counterparts operating in Pakistan. Data of five completely Islamic Banks(IBs)
and fifteen Conventional Banks (CBs), from Pakistan, have been used for the study. Study period comprises of six years from year 2008 to year 2013. Bank’s orientation, efficiency, quality
of assets and stability are the measures used to compare the performance of Shariah-compliant
and conventional banks. The Islamic Banks in Pakistan are younger in age and smaller in size
compared to the Conventional Banks. Based on the financial ratios of two types of banks, we find
that the business model of Islamic Banks is inferior to the model of Conventional Banks. Islamic
Banks are less cost efficient than Conventional Banks. However, Islamic Banks have superior
asset quality with better bank stability position.
Ameenullah Aman, Saqib Sharif, Imtiaz Arif. (2016) Comparison of Islamic Banks with Conventional Banks: Evidence from an Emerging Market, Journal of Management Sciences, Volume 3, Issue 1.
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