Performance analysis of Islamic banking in comparison with conventional banking : during crisis period (2007-2012)

Abstract

Islamic banks operate under the law of Sharia, the Islamic legal code and they have to find ways to grow and improve performance and compete in an economic environment that is structured in such a way to compete with the conventional banking with in Pakistan. This research finds the reasons through comparative analysis for of performance of Islamic banking in Pakistan with conventional banking. It provides the details about efficiency of Islamic banking in Pakistan and investigation with the conventional banking. the empirical evidence that the Islamic banking industry in the country is profitable, robust, efficient and continuously rising because of higher efficiency levels and the operations type within the country that really create the favorable environment that support financial openness for Islamic banking. To look at all these things we have done the ratio analysis of the Islamic banking and conventional banking and compare that with each other to have knowledge about which type of the bank is more profitable and performing better after a great recession and financial crisis and what are the circumstances that increased the efficiency of the banks. What are the factors to success of Islamic banking and how the external variables changed the conditions for both conventional as well as Islamic banking.