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Performance Of Interest-Free Islamic Banks Vis-À-Vis Interest-Based Conventional Banks Of Bahrain

Author

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  • Abdus Samad

    () (Utah Valley State College, 800 W University PKWY, Orem, UT 84057, USA)

Abstract

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.

Suggested Citation

  • Abdus Samad, 2004. "Performance Of Interest-Free Islamic Banks Vis-À-Vis Interest-Based Conventional Banks Of Bahrain," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 12(2), December .
  • Handle: RePEc:ije:journl:v:12:y:2004:i:2:p:
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    File URL: http://www.iium.edu.my/enmjournal/122art1.pdf
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    References listed on IDEAS

    as
    1. Abbas Mirakhor & Mohsin S. Khan, 1991. "Islamic Banking," IMF Working Papers 91/88, International Monetary Fund.
    2. 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.
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    Cited by:

    1. Tennant, David & Sutherland, Richard, 2014. "What types of banks profit most from fees charged? A cross-country examination of bank-specific and country-level determinants," Journal of Banking & Finance, Elsevier, vol. 49(C), pages 178-190.
    2. Osama M. Al-Hares (Correspondnce author) & Kashif Saleem, 2017. "Islamic Banks Financial Performance and Implications of Basel III Standards in the GCC: An Empirical Analysis," Review of Economics & Finance, Better Advances Press, Canada, vol. 7, pages 80-97, February.
    3. Abdus Samad, 2014. "Commercial Bank Non-Interest Fee Charges: Are Fee Charges Different Between Islamic Banks and Conventional Banks? Evidence from Bangladesh," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(11), pages 1681-1690, November.
    4. Abdus Samad, 2016. "Are Islamic Banks’ Non-bank Deposits Shock Resistant? A Comparison with Conventional Banks: Evidence from Bahrain," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 6(5), pages 1-6.
    5. repec:hur:ijarbs:v:7:y:2017:i:12:p:1145-1155 is not listed on IDEAS
    6. Małgorzata Czerny, 2016. "Wpływ zasad religijnych na ukształtowanie systemu rachunkowości / The Influence of Religious Principles on the Formation of the Accounting System," Annales. Ethics in Economic Life, University of Lodz, Faculty of Economics and Sociology, vol. 19(2), pages 111-128, May.
    7. Ýlker SAKINÇ & Merve GÜLEN, 2014. "The Performance Comparison of the Participation Banks Acting in Turkey via Grey Relations Analysis Method," Journal of Economic and Social Thought, KSP Journals, vol. 1(1), pages 3-14, December.
    8. Khawla Bourkhis & Mahmoud Sami Nabi, 2011. "Have Islamic Banks Been More Resistant Than Conventional Banks to the 2007-2008 Financial Crisis?," Working Papers 616, Economic Research Forum, revised 08 Jan 2011.
    9. Dinc, Yusuf, 2015. "Conversion From Shadow Banking to Regular Banking an Emperical Analysis," MPRA Paper 85333, University Library of Munich, Germany.
    10. repec:ipg:wpaper:2014-093 is not listed on IDEAS
    11. Ramlan, Nur Hu Yani, 2017. "Firm Risk and Performance: The Role of Corporate Governance in Bertam Alliance Berhad," MPRA Paper 78378, University Library of Munich, Germany, revised 01 Apr 2017.
    12. repec:eco:journ1:2017-05-52 is not listed on IDEAS
    13. repec:spr:jknowl:v:8:y:2017:i:2:d:10.1007_s13132-015-0261-8 is not listed on IDEAS
    14. Aliyu, Shehu Usman Rano, 2015. "Developing Islamic Liquidity Management Instruments: Resolving the Impasse between Central Bank of Nigeria (CBN) and Jaiz Bank Plc," MPRA Paper 68898, University Library of Munich, Germany, revised 07 Feb 2016.
    15. Sirajo Aliyu & Rosylin Mohd Yusof, 2016. "Profitability and Cost Efficiency of Islamic Banks: A Panel Analysis of Some Selected Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1736-1743.
    16. Badreldin F. Salim & Mohamed H. Mahmoud, 2016. "Islamic Finance: Is it a Time to be Considered as an Alternative during Financial Crisis Times? A Comparative Study in Gulf Cooperation Council," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 1123-1131.
    17. Jean Yves MOISSERON & Bruno Laurent MOSCHETTO & Frédéric TEULON, 2014. "Islamic finance: a review of the literature," Working Papers 2014-93, Department of Research, Ipag Business School.
    18. Limon Moinur Rasul, 2013. "Impact of Liquidity on Islamic Banks’ Profitability: Evidence from Bangladesh," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 9(2), pages 23-36, April.

    More about this item

    Keywords

    Banks; Comparative performance; Bahrain;

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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