Comparative Perusal on the Financial Performance and Market Share Growth of Islamic and Conventional Banking- Pakistan’s Perspective

Abstract

The mien of Banks is reset into financial intermediaries, developers and promoters. Thus banks act like a trustee body for the borrowers and the lenders. The axial aim of this study is to find out the extant status of financial performance of Islamic & Conventional banking in Pakistan in order to guide the stakeholders- shareholders, depositors, investors, regulatory institutes & other related organizations. To exhibit the true picture of the financial conduct of both extrusive entities the data has been extracted in the form of different financial ratios from the annual reports and financial statements for the period 2007-2011. This research paper probes the force of thirteen critical financial ratios accompanied with the major financial concerns like profitability, liquidity, risk, capital adequacy, earning ability, deployment, operational efficiency and solvency. The statistical testing tool used in this study consists of ‘co-efficient of variation’ analysis with an aim to find out the critical importance of the mean difference of the selected financial ratios.

Keywords: Islamic banks, Conventional banks, Financial performance, Capital adequacy, Liquidity, Risk, Profitability, EPS, Market Share