Evaluation of the Financial Performance between Traditional Private Commercial Banks and Islamic Banks in Bangladesh

Keywords: Traditional Private Commercial Banks, Islamic Banks, CAMEL and Performance Evaluations.

Abstract

The paper analyzes and evaluated the performance of Islamic banks and Traditional private commercial banks in Bangladesh with a duration from 2015 to 2019. The basis of the analysis used in this paper is CAMEL test.  All the relevant data has collected from the bank’s websites. To measure and compare the performance this paper has used a sample of five Islamic banks and five Traditional private commercial banks. It considered the average ratio of each year.  A standard test format (CAMEL tests) has used to analyze the performance of Islamic and Traditional private commercial banks. To justify the reliability of the data this paper has used t-tests. The outcome of this paper says that apart from the quality of the management significant difference doesn’t exist between the performance of Islamic Banks and Traditional private commercial banks in Bangladesh based on CAMEL test. Considering the quality of the management and asset quality Traditional private commercial banks perform better, but for the capital adequacy and liquidity position Islamic banks perform better in Bangladesh.

Author Biographies

S. M. Akber, Ranada Prasad Shaha University, Bangladesh

Lecturer

Department of Business Administration

Ranada Prasad Shaha University, Bangladesh

E-mail: [email protected]

 

Asha Dey, Ranada Prasad Shaha University, Bangladesh

Former Lecturer

Department of Business Administration

Ranada Prasad Shaha University, Bangladesh

E-mail: [email protected]

References

Bangladesh Bank. (2019). Financial System, Banks & FIS, (Online). Retrieved from Https://Www.Bb.Org.Bd/Fnansys/Bankfi.Php, On December 15, 2019

Ahmad, M. F., Hussain, M. S. & Hannan, S.A. (1999). Experiences in Islamic Banking: A Case Study of Islamic Bank Bangladesh. Dhaka: Institute of Policy Studies

Akkas, A. (1996). Relative Efficiency of the Conventional and Islamic Banking System in Financing Investment. Ph.D. Dissertation, Dhaka University.

El-Qorchi, M. (2005). Islamic Finance Gears Up. Finance and Development, 42(4), 46-50.

Hassan, M. & Bashir A. (2003). Determinants of Islamic Banking profitability, Paper presented at the Economic Research Forum (ERF) 10th Annual Conference, Marrakesh, Morocco, and 16-18 December

Jaffar, M., & Manarvi, I. (2011). Performance comparison of Islamic and Conventional banks in Pakistan, Global Journal of Management and Business Research, 11(1), 1-7

Merchant, P. (2012). Empirical Study of Islamic Banks versus Conventional Banks of GCC, Global Journal of Management and Business Research, 12(20).

Petersen, M & Schoeman, I. (2008). Modeling of Banking Profit via Return-on-Assets and Return-on-Equity, Proceedings of the World Congress on Engineering, 2, 1-6

Safiullah, M. (2010). Superiority of Conventional Banks & Islamic Banks of Bangladesh: A Comparative Study, International Journal of Economics and Finance, 2(3).

Samad, A. (2004). Performance of Interest-Free Islamic Banks Vis-À-Vis Interest-Based Conventional Banks of Bahrain, IIUM Journal of Economics and Management, 12(2), 1-15

Sarker, M. A. A. (1999). Islamic banking in Bangladesh: performance, problems, and prospects, International Journal of Islamic Financial Services, 1(3), 15-36.

Vong, A. & Chan, H. (2009). Determinants of Bank Profitability in Macau, Macau Monetary Research Bulletin, 12, 93-113.
Published
2020-06-27
How to Cite
Akber, S. M., & Dey, A. (2020). Evaluation of the Financial Performance between Traditional Private Commercial Banks and Islamic Banks in Bangladesh. International Journal of Islamic Banking and Finance Research, 4(2), 1-10. https://doi.org/10.46281/ijibfr.v4i2.640
Section
Research Paper/Theoretical Paper/Review Paper/Short Communication Paper