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Financial Performance of Banks in Lebanon: Conventional vs Islamic

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  • Boutheina HASHEM
  • Hiyam SUJUD

Abstract

This study compares the performance of Islamic and conventional banking in Lebanon in terms of Return on Assets and Return on Equity over the period 2012-2016. Moreover, it examines whether the internal characteristics of the bank may explain the difference in profitability between two types of banking transactions. In addition, the results of the study are analyzed using a regression analysis applied to a sample of both Islamic and conventional banks to investigate the effects of these variables on bank performance. Furthermore, results show that Islamic banks in Lebanon have better asset adequacy compared to conventional banks. However, conventional banks are better in liquidity and are on an average more profitable than Islamic ones. It is worthy to indicate that the Islamic banking industry in Lebanon is still in its infancy and only very few of the banks were active in this sector.

Suggested Citation

  • Boutheina HASHEM & Hiyam SUJUD, 2019. "Financial Performance of Banks in Lebanon: Conventional vs Islamic," International Business Research, Canadian Center of Science and Education, vol. 12(2), pages 40-51, February.
    • Handle: RePEc:ibn:ibrjnl:v:12:y:2019:i:2:p:40-51
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    References listed on IDEAS

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    More about this item

    Keywords

    conventional banks; Islamic banks; profitability indicators; ROA; ROE;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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