A comparative performance analysis of Islamic and conventional banking: a case study of Pakistan

Ahmad, Altaf and Zakariyah, Habeebullah (2021) A comparative performance analysis of Islamic and conventional banking: a case study of Pakistan. In: The Importance of New Technologies and Entrepreneurship in Business Development: In The Context of Economic Diversity in Developing Countries. Lecture Notes in Networks and Systems, 194 (194). Springer International Publishing, Nature Switzerland AG, pp. 1772-1809. ISBN 978-3-030-69220-9

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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.

Item Type:	Book Chapter
Additional Information:	8636/88901
Uncontrolled Keywords:	Performance · Efficiency · Profitability · Customer satisfaction · Commercial banks · Islamic banks · Factor analysis · Stochastic Frontier Analysis
Subjects:	H Social Sciences > HG Finance H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	DR HABEEBULLAH ZAKARIYAH
Date Deposited:	31 Mar 2021 16:32
Last Modified:	10 May 2021 14:13
URI:	http://irep.iium.edu.my/id/eprint/88901

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