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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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    References listed on IDEAS

    as
    1. Mr. Abbas Mirakhor & Mr. Mohsin S. Khan, 1991. "Islamic Banking," IMF Working Papers 1991/088, International Monetary Fund.
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    3. 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.
    4. Libby, R, 1975. "Accounting Ratios And Prediction Of Failure - Some Behavioral Evidence," Journal of Accounting Research, Wiley Blackwell, vol. 13(1), pages 150-161.
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    More about this item

    Keywords

    Banks; Comparative performance; Bahrain;
    All these keywords.

    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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