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Performance Analysis of Selected Islamic and Conventional Banks of Pakistan through CAMEL Framework

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  • Pir Qasim Shah

    (Islamia College, Peshawar)

Abstract

Paucity of indigenous research on regulatory assessment of Islamic financial institutions makes the subject an unveiled prospect. The study examines, evaluates and compares the financial activities of selected Islamic and conventional banks of Pakistan for a decennium viz. 2003-2012. Financial data was collected from annual reports using various parameters of CAMEL model and was tested by simple t-test for mean comparison. The study found significant differences between Islamic and conventional banks in risk-weighted credit exposures, regulatory capital, advances in proportion to asset portfolios, long-term debt paying abilities, management’s control over expenses in proportion to income, return on assets, and liquidity. However, provisions for non-performing credit assortments displayed insignificant differences. Out of a total of 21 tests of various financial parameters, the study found 12 areas significantly different between selected Islamic and conventional banks over a decade

Suggested Citation

  • Pir Qasim Shah, 2014. "Performance Analysis of Selected Islamic and Conventional Banks of Pakistan through CAMEL Framework," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 6(1), pages 19-39, April.
    • Handle: RePEc:bec:imsber:v:6:y:2014:i:1:p:19-39
    DOI: dx.doi.org/10.22547/BER/6.1.2
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    References listed on IDEAS

    as
    1. Laurent Weill, 2011. "Do Islamic Banks Have Greater Market Power?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 53(2), pages 291-306, June.
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