Title: Comparative Financial Performance of existing Islamic Banks and Contemporary Conventional Banks in Pakistan
Abstract: Th e banking system in Pakistan is flourishing these days. The conventional banking is in practice in Pakistan since long time and majority of the current consumers are involved in. As a Muslim, many people don't believe on conventional banking and therefore, they do not use banking services to avoid from interest. For them, the alternate system is Islamic banking, where interest-free services can be offered and they can get involved into banks. The objective of the study is to analyze the financial performance of Islamic and conventional banking industry in Pakistan. For this purpose, five Islamic & five conventional banks are selected and their financial data has been collected from year 2005 to 2009. Return on Assets (ROA) is used as a proxy and it is measured with other explanatory variables to measure the financial performance of banking industry. Descriptive Statistics, Correlation Matrix and F-Statistics are used to analyze the impact of explanatory variables. The study gives a different image of financial intermediation for Islamic banking system in Pakistan. However, there is some difference in the operational activities of Islamic and conventional banks. Their financial performance indicators are similar which are used to calculate the profitability of the banks. In the light of the analysis, it is concluded that Islamic banking system is much superior to the conventional banks. Similarly, they have the capacity to increase their market share by generating new activities in Pakistan.
Publication Year: 2011
Publication Date: 2011-01-01
Language: en
Type: article
Access and Citation
Cited By Count: 15
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot