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2021 | OriginalPaper | Chapter

A Comparative Performance Analysis of Islamic and Conventional Banking: A Case Study of Pakistan

Authors : Altaf Ahmad, Habeebullah Zakariyah

Published in: The Importance of New Technologies and Entrepreneurship in Business Development: In The Context of Economic Diversity in Developing Countries

Publisher: Springer International Publishing

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Abstract

The objective of this research is to critically evaluate the performance indicators which are used in previous studies and propose a comprehensive indicator to check the performance of selected Islamic and Conventional banks of Pakistan over the period of 2011–2016. The comprehensive indicator of performance is comprised of indicator of profitability, customer satisfaction and cost & revenue efficiency. Where the efficiencies measured using Stochastic Frontier Analysis, while overall indicator has been constructed using Principle Factor Analysis. This study provides ranking of selected banks based on the new indicator of performance and insights to what are possible determinants in conventional and Islamic banking system. This study then compared the determinants of performance such as Bank size, Operating efficiency, Management efficiency, Employee efficiency, and Funding cost between conventional and Islamic banks which are comparable in size. To compare the determinants of performance, regression analysis was applied. Feasible Generalized Least Square (FGLS) approach later used to compare the determinants of performance. Findings show that Meezan bank tops in revenue efficiency and Askari bank tops in cost efficiency. In overall performance comparison, Meezan bank tops accordingly. This study identifies Operating efficiency, Management efficiency, Employee efficiency, and Funding cost as important determinants of Pakistani banking sector.

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previous chapter A Model Development of Shariah Principle in E-Payment: The Case of Malaysia
next chapter Alternative Commercial and Operational Solutions in Islamic Banking: The Contribution of Mufti Taqi Usmani
Appendix
Available only for authorised users
Footnotes
2
Global forum on Islamic Economics & Finance, 2015 by UMT, Lahore, key speech.
 
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Metadata
Title
A Comparative Performance Analysis of Islamic and Conventional Banking: A Case Study of Pakistan
Authors
Altaf Ahmad
Habeebullah Zakariyah
Copyright Year
2021
Book
The Importance of New Technologies and Entrepreneurship in Business Development: In The Context of Economic Diversity in Developing Countries

Print ISBN: 978-3-030-69220-9

Electronic ISBN: 978-3-030-69221-6

Copyright Year: 2021

DOI
https://doi.org/10.1007/978-3-030-69221-6_129

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