European Academic Research ISSN 2286-4822
ISSN-L 2286-4822
Impact Factor: 3.4546 (UIF)
DRJI Value : 5.9 (B+)
Article Details :
Article Name :
Compliance to the Basel Accord III Capital Standards and Financial Performance: Islamic vs. Conventional Banks of Pakistan
Author Name :
Imtiaz Najam, Sajid Ali Khan, Raza Ahmad Khan
Publisher :
Bridge Center
Article URL :
Abstract :
The banking industry of a country plays a very significant role while fabricating the financial performance and economic growth of the country/region. The study assessing the financial performance of banking industry of Pakistan while seventeen conventional and five Islamic banks of Pakistan analyzed by the using of financial ratios i.e. profitability, liquidity, efficiency, solvency and Tier-I capital ratios. The quality capital of Islamic versus conventional banks examined for the period of six year i.e. 2008 to 2013 and the data of concerned banks was fetched form their published annual reports. The profitability, liquidity and solvency ratios of conventional banks are higher as compare to Islamic banks and efficiency ratios of Islamic banks are higher as compare to conventional banks. The difference between Islamic and conventional banks is significant at level 1% in term of NIM, TLD, TLA, CPD, CBD, AUR, OER, DER, DTA, EMR, TIR and CAR. The difference between Islamic and conventional banks is insignificant in term of ROA, ROE, ROD and CER. However, the results reveal that the Islamic banks are more efficient as compare to conventional banks.
Keywords :
Islamic Banks of Pakistan, Conventional Banks of Pakistan, Basel accord III Capital Standards, Financial Ratios and Financial Performance.

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