Yıl 2018, Cilt 4, Sayı 3, Sayfalar 6 - 20 2018-11-30

How Shariah Compliance and Traditional Banks Are Performing? A Case of Pakistan

Muhammad Hussain Qureshi [1] , Rukhsana Kalim [2]

18 18

The study is conducted with the objective of comparing shariah compliance and traditional banks of Pakistan from performance perspective. The relative investigations are conducted by means of t-test, for the period 2010-2017. Ratios based on CAMEL approach are applied to identify the managerial and financial performance of shariah compliance and traditional banks of Pakistan. It is observed that Shariah compliance banks are significantly better in managing capital appropriacy, managerial competency, earning quality and liquidity as compared to their traditional counterparts. The findings reveal significant implications for policy makers in assessing the capabilities of Shariah compliance and traditional banks in Pakistan, and for ascertaining the direction of future banking system in Pakistan. Findings of the study also underpin awareness and trust in Shariah compliance banks of Pakistan. Furthermore, according to authors information, there is no comprehensive research in Pakistan that differentiate the performance of Shariah compliance and traditional banks by applying CAMEL approach on variables under study as well as on current data set.

Shariah compliance Banks, Traditional Banks
  • Ahsan, M. K. (2016). Measuring Financial Performance Based on CAMEL: A Study on Selected Islamic Banks in Bangladesh. Asian Business Review, 6(1), 47-56.
  • Al Freahat, K. I. A. (2009). Evaluating Performance of Commercial Banks: An Empirical Study in Jordan. Universiti Utara Malaysia.
  • Alzghoul, M. O. (2015). Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan. Eastern Mediterranean University (EMU)-Doğu Akdeniz Üniversitesi (DAÜ).
  • Ara, U. H. A., & Haque, E. (2015). Asset Liability Mismatch-An Empirical study on nationalized commercial banks in Bangladesh. Asian Business Review, 4(2), 11-19.
  • Ariff, M. (1989). Islamic banking in Malaysia: framework, performance, and lessons. International Journal of Economics, Management and Accounting, 2(2).
  • Azhar Rosly, S., & Afandi Abu Bakar, M. (2003). Performance of Islamic and mainstream banks in Malaysia. International Journal of Social Economics, 30(12), 1249-1265.
  • Bank, E. C. (2010). Beyond ROE–How to measure bank performance.
  • Bashir, A.-H. M. (2001). Assessing the performance of Islamic banks: Some evidence from the Middle East.
  • Bennett, R. L., Güntay, L., & Unal, H. (2015). Inside debt, bank default risk, and performance during the crisis. Journal of Financial Intermediation, 24(4), 487-513.
  • Bryant, J. (1980). A model of reserves, bank runs, and deposit insurance. Journal of banking & finance, 4(4), 335-344.
  • De Jonghe, O., & Öztekin, Ö. (2015). Bank capital management: International evidence. Journal of Financial Intermediation, 24(2), 154-177.
  • Demirgüç-Kunt, A., & Huizinga, H. (1999). Determinants of commercial bank interest margins and profitability: some international evidence. The World Bank Economic Review, 13(2), 379-408.
  • Diamond, D. W., & Dybvig, P. H. (1983). Bank runs, deposit insurance, and liquidity. The journal of political economy, 401-419.
  • Dincer, H., Gencer, G., Orhan, N., & Sahinbas, K. (2011). A performance evaluation of the Turkish banking sector after the global crisis via CAMELS ratios. Procedia-Social and Behavioral Sciences, 24, 1530-1545.
  • Du, B., & Palia, D. (2018). Short-term debt and bank risk. Journal of Financial and Quantitative Analysis, 1-21. Erol, C., F. Baklaci, H., Aydoğan, B., & Tunç, G. (2014). Performance comparison of Islamic (participation) banks and commercial banks in Turkish banking sector. EuroMed Journal of Business, 9(2), 114-128.
  • Fatima, N. (2014). Capital appropriacy: A Financial Soundness Indicator for Banks. Global Journal of Finance and Management, 6(8), 771-776.
  • Hisham Yahya, M., Muhammad, J., & Razak Abdul Hadi, A. (2012). A comparative study on the level of efficiency between Islamic and conventional banking systems in Malaysia. International Journal of Islamic and Middle Eastern Finance and Management, 5(1), 48-62.
  • Husna, H. N., & Rahman, R. A. (2012). Financial distress-Detection model for Islamic banks. International Journal of Trade, Economics and Finance, 3(3), 158.
  • Iqbal, M. (2001). Islamic and conventional banking in the nineties: a comparative study. Islamic Economic Studies, 8(2), 1-27.
  • Islam, M. T. U., & Ashrafuzzaman, M. (2016). A Comparative Study of Islamic and Conventional Banking in Bangladesh: Camel Analysis. Journal of Business and Technology (Dhaka), 10(1), 73-91.
  • Jaffar, M., & Manarvi, I. (2011). Performance comparison of Islamic and Conventional banks in Pakistan. Global Journal of Management and Business Research, 11(1).
  • Kabir Hassan, M. (1999). Islamic banking in theory and practice: The experience of Bangladesh. Managerial Finance, 25(5), 60-113.
  • Kabir, M. A., & Dey, S. (2012). Performance Analysis through CAMEL Rating: A Comparative Study of Selected Private Commercial Banks in Bangladesh. Journal of Politics & Governance, 1(2/3), 16-25.
  • Kamaruddin, B. H., & Mohd, R. (2013). Camel Analysis of Islamic Banking And Conventional Banking In Malaysia. Business and Management Quarterly Review, 4, 81-89.
  • Kamaruddin, B. H., Safab, M. S., & Mohd, R. (2008). Assessing production efficiency of Islamic banks and conventional bank Islamic windows in Malaysia. International Journal of Business and Management Science, 1(1), 31.
  • Karapinar, A., & Dogan, I. C. (2015). An Analysis on the Performance of the Participation Banks in Turkey. Accounting and Finance Research, 4(2), p24.
  • Kouser, R., & Saba, I. (2012). Gauging the financial performance of banking sector using camel model: Comparison of conventional, mixed and pure Islamic banks in Pakistan. International Research Journal of Finance and Economics, 82, 67-88.
  • Li, L., Chen, J., Gao, H., & Xie, L. (2018). The certification effect of government R&D subsidies on innovative entrepreneurial firms’ access to bank finance: evidence from China. Small Business Economics, 1-19.
  • Liu, J., & Pariyaprasert, W. (2014). Determinants of Bank Performance: The Application of the CAMEL Model to Banks Listed in China’s Stock Exchanges from 2008 to 2011. AU-GSB e-JOURNAL, 7(2).
  • Moussa, M. A. B. (2018). Determinants of bank capital: Case of Tunisia. Journal of Applied Finance & Banking, 8(2), 1-15.
  • Muhmad, S. N., & Hashim, H. A. (2015). Using the camel framework in assessing bank performance in Malaysia. International Journal of Economics, Management and Accounting, 23(1).
  • Nimalathasan, B. (2008). A comparative study of financial performance of banking sector in Bangladesh–an application of CAMELS rating system. Economic and Administrative Series, 2, 141-152.
  • Olson, D., & Zoubi, T. A. (2008). Using accounting ratios to distinguish between Islamic and conventional banks in the GCC region. The International Journal of Accounting, 43(1), 45-65.
  • Ongore, V. O., & Kusa, G. B. (2013). Determinants of financial performance of commercial banks in Kenya. International Journal of Economics and Financial Issues, 3(1), 237-252.
  • Roman, A., & Şargu, A. C. (2013). Analysing the financial soundness of the commercial banks in Romania: an approach based on the camels framework. Procedia economics and finance, 6, 703-712.
  • Rozzani, N., & Rahman, R. A. (2013). Determinants of Bank Performance: Conventional versus Islamic. Journal Pengurusan, 39, 129-139.
  • Safiullah, M. (2010). Superiority of conventional banks & Islamic banks of Bangladesh: A comparative study. International Journal of Economics and Finance, 2(3), 199.
  • Saleh, A. S., & Zeitun, R. (2006). Islamic banking performance in the Middle East: a case study of Jordan. Faculty of Commerce-Economics Working Papers, 157.
  • Samad, A. (1999). Comparative efficiency of the Islamic bank vis-à-vis conventional banks in Malaysia. IIUM Journal of Economics and Management, 7(1), 1-27.
  • Samad, A., & Hassan, M. K. (1999). The performance of Malaysian Islamic bank during 1984-1997: An exploratory study. International Journal of Islamic Financial Services, 1(3), 1-14.
  • Sarker, M. A. A. (1999). Islamic banking in Bangladesh: performance, problems, and prospects. International Journal of Islamic Financial Services, 1(3), 15-36.
  • Shaikh, A., Sharif, S., & Arif, I. (2015). Comparison of Islamic banks with Conventional banks: Evidence from an emerging market. Available at SSRN 2565273.
  • Shar, A. H., ali Shah, M., & Jamali, H. (2010). Performance evaluation of banking sector in Pakistan: An application of Bankometer. International Journal of Business and Management, 5(8), p113.
Birincil Dil en
Konular İktisat
Dergi Bölümü Makaleler
Yazarlar

Yazar: Muhammad Hussain Qureshi (Sorumlu Yazar)
Kurum: Virtual University of Pakistan
Ülke: Pakistan


Yazar: Rukhsana Kalim
Kurum: University of Management and Technology
Ülke: Pakistan


Bibtex @araştırma makalesi { ijisef416706, journal = {Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi}, issn = {2149-8393}, eissn = {2149-8407}, address = {Politik Ekonomik ve Sosyal Araştırmalar Merkezi}, year = {2018}, volume = {4}, pages = {6 - 20}, doi = {10.32957/ijisef.416706}, title = {How Shariah Compliance and Traditional Banks Are Performing? A Case of Pakistan}, key = {cite}, author = {Kalim, Rukhsana and Qureshi, Muhammad Hussain} }
APA Qureshi, M , Kalim, R . (2018). How Shariah Compliance and Traditional Banks Are Performing? A Case of Pakistan. Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi, 4 (3), 6-20. Retrieved from http://dergipark.gov.tr/ijisef/issue/40712/416706
MLA Qureshi, M , Kalim, R . "How Shariah Compliance and Traditional Banks Are Performing? A Case of Pakistan". Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi 4 (2018): 6-20 <http://dergipark.gov.tr/ijisef/issue/40712/416706>
Chicago Qureshi, M , Kalim, R . "How Shariah Compliance and Traditional Banks Are Performing? A Case of Pakistan". Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi 4 (2018): 6-20
RIS TY - JOUR T1 - How Shariah Compliance and Traditional Banks Are Performing? A Case of Pakistan AU - Muhammad Hussain Qureshi , Rukhsana Kalim Y1 - 2018 PY - 2018 N1 - DO - T2 - Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi JF - Journal JO - JOR SP - 6 EP - 20 VL - 4 IS - 3 SN - 2149-8393-2149-8407 M3 - UR - Y2 - 2018 ER -
EndNote %0 Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi How Shariah Compliance and Traditional Banks Are Performing? A Case of Pakistan %A Muhammad Hussain Qureshi , Rukhsana Kalim %T How Shariah Compliance and Traditional Banks Are Performing? A Case of Pakistan %D 2018 %J Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi %P 2149-8393-2149-8407 %V 4 %N 3 %R %U
ISNAD Qureshi, Muhammad Hussain , Kalim, Rukhsana . "How Shariah Compliance and Traditional Banks Are Performing? A Case of Pakistan". Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi 4 / 3 (Kasım 2018): 6-20.