تلخیص
Broadly speaking, there are two types of banking systems in the world, Islamic, and Conventional, Banking System. Conventional banking is an interest-based system while Islamic banking is an interest-free banking system. The prime aim of any bank is to earn maximum profit from its various products and services. The banks provide various kinds of products and services to the customers for the satisfaction of their financial needs. During the process, banks create assets and sometimes incur some expenses too. The assets and liabilities of the banks actually determine the viability as well as the profitability of the banks. It is in this context, that this study has tried to know as to which banking system is more viable and profitable. A sample of four banks, two from Islamic and two from conventional banks, has been selected and applied the Financial Ratios. The findings suggest that Islamic banks are as profitable as conventional banks although Islamic banks are infant in the banking industry of Pakistan. The Liquidity and Solvency Ratios suggested that Islamic banks are better than conventional because Islamic banks maintain lower debt and more equity in capital structure which decreases the risk of default. Islamic banks are more efficient in cost but less efficient in profit and revenue as compared to conventional banks.
Zahoor Khan, Muhammad Farooq, Muhammad Fawad. (2011) Analysis of the Performance of Islamic and Conventional Banks in Pakistan, Journal of Managerial Sciences, Volume 5, Issue 1.
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