Performance Of Interest-Free Islamic Banks Vis-À-Vis Interest-Based Conventional Banks Of Bahrain
This paper examines the comparative performance of Bahrain’s interest-free Islamic banks and the interest-based conventional commercial banks during the post Gulf War period with respect to (a) profitability, (b) liquidity risk, and (c) credit risk. Nine financial ratios are used in measuring these performances. Applying Student’s t-test to financial ratios for Islamic and conventional commercial banks in Bahrain for the period 1991-2001, the paper concludes that there is no major difference in performance between Islamic and conventional banks with respect to profitability and liquidity. However, the study finds that there exists a significant difference in credit performance.
Volume (Year): 12 (2004)
Issue (Month): 2 (December JEL classification: G20, G21 Key words: Banks, Comparative performance, Bahrain)
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- Abbas Mirakhor & Mohsin S. Khan, 1991. "Islamic Banking," IMF Working Papers 91/88, International Monetary Fund.
- Aggarwal, Rajesh K & Yousef, Tarik, 2000. "Islamic Banks and Investment Financing," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(1), pages 93-120, February.