The Financial Performance Analysis of Islamic Vs Conventional Banks: An Empirical study on Bangladesh Mohotarema Rashid

     The Financial Performance Analysis of Islamic Vs Conventional Banks: An Empirical study on Bangladesh

Author (s)

Mohotarema Rashid

Abstract

This paper focuses on the comprehensive comparison about the financial performance of conventional and non conventional banks of Bangladesh. The study shows that in spite of a few exceptions in general conventional overall performance was better than the non conventional banks. I have chosen five Islamic banks and five Conventional Banks & analyze different data to find out the effect of CAMEL Factors on Return on Equity. Here I have used different dependent variables to analyze the impact of each variable on Return on Equity. The variables are Capital Adequacy, Asset Quality, Management Quality, Earnings & Liquidity The regression model indicates that Capital adequacy, Asset Quality, have significant negative impact on Return on Equity for conventional bank. This model also indicates Management Quality & Earnings Quality and Liquidity are positively related to Return on Equity and this variable has also significant impact on Return on Equity. I have used this same model for non conventional banks and found that Capital adequacy, Asset Quality and Earnings and Liquidity have negative insignificant impact on Return on Equity & only Management Quality has negative insignificant impact on return on asset. Then In my study I have used descriptive statistics to compare between these two banking system in terms of CAMEL factors. I have found that conventional bank dominates non conventional bank in terms of Capital Adequacy, Asset Quality, Earnings, whereas non conventional bank dominates conventional banks in terms of Management Quality and Liquidity.

Key words: CAMEL, Conventional Banks, Non Conventional Banks, Performance Analysis.

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Title: The Financial Performance Analysis of Islamic Vs Conventional Banks: An Empirical study on Bangladesh
Author:

Mohotarema Rashid

Journal Name: International Journal of Science and Business
Website: ijsab.com
ISSN: ISSN 2520-4750 (Online), ISSN 2521-3040 (Print)
DOI: https://doi.org/10.5281/zenodo.3710665
Media: Online & Print
Volume: 4
Issue: 1
Acceptance Date: 08/03/2020
Date of Publication: 14/03/2020
PDF URL: http://ijsab.com/wp-content/uploads/459.pdf
Free download: Available
Page: 241-252
First Page: 241
Last Page: 252
Paper Type: Research Paper
Current Status: Published

Cite This Article:

Mohotarema Rashid (2020). The Financial Performance Analysis of Islamic Vs Conventional Banks: An Empirical study on Bangladesh. International Journal of Science and Business, 4(1), 241-252.  doi: 10.5281/zenodo.3710665

Retrieved from http://ijsab.com/wp-content/uploads/459.pdf

 

About Author (s)

Mohotarema Rashid, Lecturer (Finance) Bangladesh Army University of Science and Technology, Bangladesh.

 

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DOI: https://doi.org/10.5281/zenodo.3710665

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