Comparison between Islamic and Conventional Banking: Evidence from Malaysia
Purpose: To determine the financial performance of Islamic banks and non-Islamic banks from 2003 to 2010 in Malaysia by applying the theory of Sharī’ah Conformity and Profitability model. Methodology: This study used accounting ratios which included profitability ratio, liquidity ratio and credit r...
| Main Authors: | , , , , , |
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| Format: | Article |
| Language: | English |
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American Research Institute for Policy Development
2014
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/16945/ http://ir.unimas.my/id/eprint/16945/7/Comparison.pdf |
| _version_ | 1848838173350690816 |
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| author | Abduallah, Al-Mamun Qaiser Rafique, Yasser Harry, Entebang Md. Ashikur, Rahman Thurai Murugam, Nathan Shazali, Abu Mansor |
| author_facet | Abduallah, Al-Mamun Qaiser Rafique, Yasser Harry, Entebang Md. Ashikur, Rahman Thurai Murugam, Nathan Shazali, Abu Mansor |
| author_sort | Abduallah, Al-Mamun |
| building | UNIMAS Institutional Repository |
| collection | Online Access |
| description | Purpose: To determine the financial performance of Islamic banks and non-Islamic banks from 2003 to 2010 in Malaysia by applying the theory of Sharī’ah Conformity and Profitability model. Methodology: This study used accounting ratios which included profitability ratio, liquidity ratio and
credit risk ratio to measure the financial performance of the Malaysian banks. Findings: Results indicate that conventional banks perform better in profitability, while Islamic banks perform better in liquidity and credit risk. In t-test of the return on asset (ROA) and total equity to net loans, there are no major difference between Islamic banks and non-Islamic banks. In the return on equity and common equity to total assets, there are statistically significant differences in these two groups. The statistically significant difference was shown in the area of liquidity which means that the Islamic banks liquidity performance has major difference with the non-Islamic banks. These finding are partially rejecting null hypothesis of profitability ratio and credit risk ratio. Moreover, the results are also rejecting null hypothesis of liquidity ratio, that there is statistically significant difference in
the mean of liquidity ratio between Islamic banks and non-Islamic banks. |
| first_indexed | 2025-11-15T06:51:21Z |
| format | Article |
| id | unimas-16945 |
| institution | Universiti Malaysia Sarawak |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T06:51:21Z |
| publishDate | 2014 |
| publisher | American Research Institute for Policy Development |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | unimas-169452022-07-05T07:01:46Z http://ir.unimas.my/id/eprint/16945/ Comparison between Islamic and Conventional Banking: Evidence from Malaysia Abduallah, Al-Mamun Qaiser Rafique, Yasser Harry, Entebang Md. Ashikur, Rahman Thurai Murugam, Nathan Shazali, Abu Mansor HB Economic Theory HG Finance Purpose: To determine the financial performance of Islamic banks and non-Islamic banks from 2003 to 2010 in Malaysia by applying the theory of Sharī’ah Conformity and Profitability model. Methodology: This study used accounting ratios which included profitability ratio, liquidity ratio and credit risk ratio to measure the financial performance of the Malaysian banks. Findings: Results indicate that conventional banks perform better in profitability, while Islamic banks perform better in liquidity and credit risk. In t-test of the return on asset (ROA) and total equity to net loans, there are no major difference between Islamic banks and non-Islamic banks. In the return on equity and common equity to total assets, there are statistically significant differences in these two groups. The statistically significant difference was shown in the area of liquidity which means that the Islamic banks liquidity performance has major difference with the non-Islamic banks. These finding are partially rejecting null hypothesis of profitability ratio and credit risk ratio. Moreover, the results are also rejecting null hypothesis of liquidity ratio, that there is statistically significant difference in the mean of liquidity ratio between Islamic banks and non-Islamic banks. American Research Institute for Policy Development 2014 Article PeerReviewed text en http://ir.unimas.my/id/eprint/16945/7/Comparison.pdf Abduallah, Al-Mamun and Qaiser Rafique, Yasser and Harry, Entebang and Md. Ashikur, Rahman and Thurai Murugam, Nathan and Shazali, Abu Mansor (2014) Comparison between Islamic and Conventional Banking: Evidence from Malaysia. International Journal of Islamic Banking & Finance, 4 (1). ISSN 2220-8291 https://www.researchgate.net/publication/261288216 10.12816/0006958 |
| spellingShingle | HB Economic Theory HG Finance Abduallah, Al-Mamun Qaiser Rafique, Yasser Harry, Entebang Md. Ashikur, Rahman Thurai Murugam, Nathan Shazali, Abu Mansor Comparison between Islamic and Conventional Banking: Evidence from Malaysia |
| title | Comparison between Islamic and Conventional Banking:
Evidence from Malaysia |
| title_full | Comparison between Islamic and Conventional Banking:
Evidence from Malaysia |
| title_fullStr | Comparison between Islamic and Conventional Banking:
Evidence from Malaysia |
| title_full_unstemmed | Comparison between Islamic and Conventional Banking:
Evidence from Malaysia |
| title_short | Comparison between Islamic and Conventional Banking:
Evidence from Malaysia |
| title_sort | comparison between islamic and conventional banking:
evidence from malaysia |
| topic | HB Economic Theory HG Finance |
| url | http://ir.unimas.my/id/eprint/16945/ http://ir.unimas.my/id/eprint/16945/ http://ir.unimas.my/id/eprint/16945/ http://ir.unimas.my/id/eprint/16945/7/Comparison.pdf |