Abstract:
The study was direct to test the hypothesis to identify and compare is there any distinction between the performance and risk of Islamic and conventional banks with respect to growth in deposit from liability side and growth in customer product from asset side to measure customer trust of both banks. We used the Past data from different financial statements of the bank from the official website of both banks. We used Correlation, regression and financial ratio analysis to measure customer trust with respect to profitability measure with ROA, ROE, OPM, and efficiency cost measure with CTI, NIE, liquidity measure with CTA, CTD and risk with Z-score affected conventional and Islamic bank. So after analysis of data, the study contradicts many findings in the past in terms of customer trust related to performance and risk and shows that there is sufficient distinction between both areas of banking. The evidence from the period (2009-2018) shows that Islamic banking performed consistently than conventional in terms of profitability and risk but the conventional bank is better in efficiency and liquidity. But in terms of customer trust, there is a positive association of both banks related to profitability with (GD) but contrast related to (GCP), the efficiency both bank had no effect on customer trust but in term of liquidity there is contrast in both related to customer trust where conventional bank had positive association with (GD) and had no effect on (GCP) but Islamic bank had no effect on (GD) and (GCP). And at last risk of both banks had no effect on customer trust. But overall customer trust of an Islamic bank is better than a conventional bank because of an increase in the value of the ratio in the growth in deposit and growth in customer product are more than conventional. The reason is the growth of Islamic banking because of improvement in profitability and better in diversifying the risk for the bank and it reflects the future of Islamic banks is higher than a conventional bank
