Comparative Performance and Profitability of Selected Islamic and Conventional Banks in Pakistan

Abstract

There is a general perception that the performance of Islamic banks is worse then conventional banks, in this study we measured the comparative performance and profitability of selected Islamic and conventional banks operating in Pakistan. For this purpose we have selected three Islamic and three conventional banks.For measurement of performance & profitability of Islamic & conventional banks following indicators are studied and analyzed to know which category of banks (Islamic or Conventional) or performing better then other; return on asset, return on equity, efficiency ratios, profit margin, net interest margin, asset turnover ratios, etc.Different types of tools and techniques are used to know the relative performance and profitability. Profitability Ratios. Standard Deviation. T-Test. F-Test. At the end we have concluded the result by using these techniques mentioned above. The result indicates that more or less the performance and profitability of banks of both categories are same.This discussion makes it clear that Islamic banking is not a negligible or merely temporary phenomenon. Islamic banks are here to stay and there are signs that they will continue to grow and expand.