Comparative analysis of financial performance between Islamic banks and conventional banks in Turkey, Qatar, Bahrain, Saudi Arabia and Pakistan

Islamic Banking and institutions that support comparison on banking systems have been on the constant rise in the previous decades. This has, in turn, attracted the attention of scholars and practitioners in the banking sector who seek to establish the unique features Islamic banks have over the conventional counterparts. Existing studies have therefore focused on nature and processes involved in Islamic banking and little attention has been given to comparative studies of the bank's performance in different parts of the world. This research undertakes a comparative study of the banks' performance in Qatar, Pakistan, Saudi Arabia, Turkey and Bahrain between 2016 and 2018.It adopts the Financial Ratio Analysis approach to examine the similarity and difference in the performance of five Islamic banks and five conventional banks selected from the case study countries (One conventional bank and one Islamic Bank per country). Using seven indicators to measure and compare the liquidity, profitability, solvency and risk each of these institutions face, a performance indicator is then derived. To test the significance of the findings, a T-test is adopted in the process. The study finds that performance in conventional and Islamic banks vary in the selected nations. In particular, the findings indicate less profit, more solvent, lower risk and more liquid in Islamic banks than the conventional financial institutions. Keywords: Profitability, Solvency, Conventional Banks, Risk, Islamic Banks, Comparative Analysis, Liquidity