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Financial performance of Islamic and conventional banks during and after US sub-prime crisis in Pakistan: a comparative study

Islamic banking system that is based on Shariah principles is considered more resilient to the financial shocks due to its interest free nature. This study is aimed to compare the financial performances and investigate whether Islamic banks are more profitable, liquid, less risky and operation...

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Main Authors: Muhammad Bilal, Hanudin Amin
Format: Article
Language:English
Published: Kolej University Islam Sultan Azlan Shah 2015
Subjects:
HG Finance
Online Access:https://eprints.ums.edu.my/id/eprint/19850/1/Financial%20performance%20of%20Islamic.pdf
https://eprints.ums.edu.my/id/eprint/19850/
http://www.gjat.my/gjat122015/9220150502.pdf
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spelling my.ums.eprints.198502018-04-19T03:35:03Z https://eprints.ums.edu.my/id/eprint/19850/ Financial performance of Islamic and conventional banks during and after US sub-prime crisis in Pakistan: a comparative study Muhammad Bilal Hanudin Amin HG Finance Islamic banking system that is based on Shariah principles is considered more resilient to the financial shocks due to its interest free nature. This study is aimed to compare the financial performances and investigate whether Islamic banks are more profitable, liquid, less risky and operationally efficient compared to conventional banks during and after US Sub-prime crisis in Pakistan. The time span used for the study was from 2007 to 2012. Thirteen financial ratios composed of five Islamic and five conventional banks to measure the financial performance in terms of profitability, risk and solvency, liquidity and capital adequacy. Independent sample t-test is used to determine the significance of mean differences of selected ratios. The results of profitability measures indicate that Islamic banks remained less profitable; however, liquidity performances of Islamic banks were better than conventional banks. However, overall operational efficiency measures are not in favour of Islamic banks. The study concluded that conventional banks performed more efficiently and profitably as compared to Islamic banks. The opportunity of future empirical study is recommended at the end of this paper. Kolej University Islam Sultan Azlan Shah 2015-12 Article PeerReviewed text en https://eprints.ums.edu.my/id/eprint/19850/1/Financial%20performance%20of%20Islamic.pdf Muhammad Bilal and Hanudin Amin (2015) Financial performance of Islamic and conventional banks during and after US sub-prime crisis in Pakistan: a comparative study. Global Journal Al-Thaqafah, 5 (2). pp. 73-87. ISSN 2232-0474 http://www.gjat.my/gjat122015/9220150502.pdf
institution Universiti Malaysia Sabah
building UMS Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaysia Sabah
content_source UMS Institutional Repository
url_provider http://eprints.ums.edu.my/
language English
topic HG Finance
spellingShingle HG Finance
Muhammad Bilal
Hanudin Amin
Financial performance of Islamic and conventional banks during and after US sub-prime crisis in Pakistan: a comparative study
description Islamic banking system that is based on Shariah principles is considered more resilient to the financial shocks due to its interest free nature. This study is aimed to compare the financial performances and investigate whether Islamic banks are more profitable, liquid, less risky and operationally efficient compared to conventional banks during and after US Sub-prime crisis in Pakistan. The time span used for the study was from 2007 to 2012. Thirteen financial ratios composed of five Islamic and five conventional banks to measure the financial performance in terms of profitability, risk and solvency, liquidity and capital adequacy. Independent sample t-test is used to determine the significance of mean differences of selected ratios. The results of profitability measures indicate that Islamic banks remained less profitable; however, liquidity performances of Islamic banks were better than conventional banks. However, overall operational efficiency measures are not in favour of Islamic banks. The study concluded that conventional banks performed more efficiently and profitably as compared to Islamic banks. The opportunity of future empirical study is recommended at the end of this paper.
format Article
author Muhammad Bilal
Hanudin Amin
author_facet Muhammad Bilal
Hanudin Amin
author_sort Muhammad Bilal
title Financial performance of Islamic and conventional banks during and after US sub-prime crisis in Pakistan: a comparative study
title_short Financial performance of Islamic and conventional banks during and after US sub-prime crisis in Pakistan: a comparative study
title_full Financial performance of Islamic and conventional banks during and after US sub-prime crisis in Pakistan: a comparative study
title_fullStr Financial performance of Islamic and conventional banks during and after US sub-prime crisis in Pakistan: a comparative study
title_full_unstemmed Financial performance of Islamic and conventional banks during and after US sub-prime crisis in Pakistan: a comparative study
title_sort financial performance of islamic and conventional banks during and after us sub-prime crisis in pakistan: a comparative study
publisher Kolej University Islam Sultan Azlan Shah
publishDate 2015
url https://eprints.ums.edu.my/id/eprint/19850/1/Financial%20performance%20of%20Islamic.pdf
https://eprints.ums.edu.my/id/eprint/19850/
http://www.gjat.my/gjat122015/9220150502.pdf
_version_ 1760229636494589952
score 13.211869

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