An analysis of the Pakistani banking industry's performance in relation to Islamic and conventional banking
Keywords:
Financial comparison, Islamic banking, conventional bankingAbstract
Islamic banking upholds the financial laws of Sharia. Here, transactions are carried out honestly, without the use of riba, and with an emphasis on furthering Islamic economic goals and objectives. On the other hand, conventional banks follow regulations that were created by humans, with the set interest rate acting as the primary activity. This research analyses the performance of Islamic and conventional banks in Pakistan from 2020 to 2022. The performance of two conventional banks (MCB and HBL) and two Islamic banks (Meezan and Dubai Islamic) in Pakistan from 2020 to 2022 will be examined and assessed in this study. Financial ratio analysis for liquidity, profitability, solvency, and activity analysis of the designated institutions from both categories were performed to evaluate total performance. According to the findings, conventional banks in Pakistan would be more profitable than Islamic banks from 2020 to 2022. In the remaining ratios of current, cash, debt to asset, and asset turnover, Islamic banks outperform conventional banks in Pakistan.
https://doi.org/10.5281/zenodo.10256462
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