Financial Management Analysis of Islamic and Conventional Banking in Selected Countries

Journal of Financial Management and Analysis, 29(2):2016

Posted: 2 May 2017

See all articles by Alex Faseruk

Alex Faseruk

Memorial University of Newfoundland (MNU) - Faculty of Business Administration

Ashrafee T Hossain

Memorial University of Newfoundland (MNU) - Faculty of Business Administration

Basit Baig

Independent

Date Written: 2016

Abstract

The study investigatesthe impact of the 2008 global financial crisis on the banking sector within six Islamic countries by examining how Islamic banks fared compared to conventional banks.Two Islamic and two conventional banks were selected across six different Islamic countries and compared via eight different performance metrics. To eliminate bias, countries were selected from disparate political, geographical, and ideological backgrounds. The results were: i. Islamic banks in G20 countries performed better than conventional banks, while the opposite was true in non-G20 countries; ii. Islamic banks in constitutionally Islamic countries performed better than conventional banks; and iii. Islamic banks in authoritative regimes outperformed conventional banks, while the opposite was true for democratic countries. Results indicate that the conservative nature of Islamic banking was instrumental in protecting them from the downturn that the conventional banks experienced during the financial crisis.

Keywords: Islamic banking-cum-better management, Sharia, financial crisis, Conventional banks

JEL Classification: B41, C82, E65, G21, N20, O19

Suggested Citation

Faseruk, Alex and Hossain, Ashrafee T and Baig, Basit, Financial Management Analysis of Islamic and Conventional Banking in Selected Countries (2016). Journal of Financial Management and Analysis, 29(2):2016, Available at SSRN: https://ssrn.com/abstract=2958406

Alex Faseruk (Contact Author)

Memorial University of Newfoundland (MNU) - Faculty of Business Administration ( email )

St. John's, Newfoundland A1B 3X5
Canada

Ashrafee T Hossain

Memorial University of Newfoundland (MNU) - Faculty of Business Administration ( email )

St. John's, Newfoundland A1B 3X5
Canada

Basit Baig

Independent

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