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The Performance and Efficiency of Islamic Banking in South Asian Countries

Author

Listed:
  • Muhammad IRFAN

    (Department of Management Sciences, COMSATS Institute of Information Technology, Abbottabad, 20060, Pakistan Author-Name: Yasir MAJEED
    Department of Management Sciences, University of Lahore, Islamabad, Pakistan)

  • Khalid ZAMAN

    (Department of Management Sciences, COMSATS Institute of Information Technology, Abbottabad, 20060, Pakistan)

Abstract

The objective of this study is to estimate and analyze the Islamic banks efficiency in South Asian Countries. The study sample consists of four countries i.e. Pakistan, Iran, Brunei and Bangladesh for being similar legal, social and economic framework for Islamic banking systems. Stochastic frontier approach is used to estimate the performance through input and output method for the period of 2004 to 2011. Results demonstrate that Islamic banking is efficient about 98.19% with respect to return on asset ratio; with respect to return on equity ratio is about 91.4% and 77.03% with respect to net profit ratio. As per the efficiency-ranking measurement, Brunei stands at top followed by Pakistan, Iran and Bangladesh among the South Asian countries.

Suggested Citation

  • Muhammad IRFAN & Khalid ZAMAN, 2014. "The Performance and Efficiency of Islamic Banking in South Asian Countries," Economia. Seria Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 17(2), pages 223-237, December.
    • Handle: RePEc:rom:econmn:v:17:y:2014:i:2:p:223-237
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    References listed on IDEAS

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    More about this item

    Keywords

    Bank’s performance indicators; Islamic Banks; Stochastic frontier analysis; South Asian Countries.;
    All these keywords.

    JEL classification:

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

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