Financial performance of conventional and Islamic banks in Bahrain: a comparative study

Banks and Bank Systems

Ahmad Sahwan¹  Mohammad Selim²  Sayel Ramadhan³ 

[1] External Auditor, B.Sc. KPMG Bahrain;Ph.D., Associate Professor, Department of Economics and Finance, College of Business Administration, University of Bahrain;Ph.D., Professor, Department of Accounting, College of Business Administration, University of Bahrain;

关键词: conventional banks;    cost of intermediation;    financial performance;    Islamic banks;    ratios;   

DOI  :  10.21511/bbs.14(4).2019.18

来源: DOAJ

【 摘 要 】

The main purpose of this study is to identify the variables that influence the financial performance of both types of banks, Islamic and conventional, and compare their financial performance over the period of 2003–2016. Banks listed on the Bahrain Bourse as of December 31, 2016 were used in the study, with a total of seven banks, of which three are Islamic and four are conventional. To make an appropriate comparative study, financial ratio analysis is used. Multiple regression and paired sample t-test are used to analyze the data. Return on assets (ROA) and return on equity (ROE) are considered as the basis for measuring financial performance and are set as dependent variables. The analysis of the results shows that conventional banks perform better than Islamic banks in terms of profitability. The results also show that ROA is significantly related to risk, cost of intermediation and efficiency ratios, while ROE is highly influenced by risk ratios only. Moreover, it was found out that the relationship between asset size and the performance of banks is insignificant, while the relationship between the number of branches and both ROA and ROE is significant.

【 授权许可】

Unknown