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Financial Performance Of Islamic And Conventional Banks: Evidence From Jordan

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  • Maysa’a Munir Milhem
  • Rasha M. S. Istaiteyeh

Abstract

This article investigates the performance of Islamic banks versus conventional counterparts in Jordan over the period (2009-2013) using financial ratio analysis. A total of 16 banks (13 conventional and 3 Islamic) were considered. A comparative study is undertaken based on performance indicators, 13 financial ratios were estimated to measure performances in terms of profitability, liquidity, risk and solvency, and efficiency. T-test is used in determining their significance. The results show that there are differences in performance between Islamic and conventional banks in Jordan during study period in terms Islamic banks are less profitable, more liquid, less risky, and less efficient comparing to conventional banks. However, there was no significant difference in profitability ratios, but there was a significant difference in liquidity ratios and risk and solvency ratios between conventional and Islamic banks

Suggested Citation

  • Maysa’a Munir Milhem & Rasha M. S. Istaiteyeh, 2015. "Financial Performance Of Islamic And Conventional Banks: Evidence From Jordan," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 9(3), pages 27-41.
    • Handle: RePEc:ibf:gjbres:v:9:y:2015:i:3:p:27-41
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    References listed on IDEAS

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    Cited by:

    1. Hussein Khasharmeh, 2018. "Does Liquidity Influence Profitability in Islamic Banks of Bahrain: An Empirical Study?," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 9(2), pages 236-248, April.
    2. Sutrisno & Agus Widarjono, 2018. "Maqasid Sharia Index, Banking Risk and Performance Cases in Indonesian Islamic Banks," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(9), pages 1175-1184, September.

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    More about this item

    Keywords

    Bank Efficiency; Financial Ratios; Jordan; Islamic Banks; Conventional Banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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