Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan

ABSTRACT: This study conducts a comparative performance analysis of Islamic and conventional banks in Jordan. The aim of this study is to analyze and compare the Islamic banks and conventional banks in terms of their profitability and safety. We choose a sample of two Islamic and three conventional banks for our analysis and used the CAMEL rating to compare performance of these two sets of banks. The analysis was conducted for a period of seven years between the years 2005-2011. Trend analysis is also used to examine how the performance of Islamic and conventional banks changed over these seven years. The findings of this research indicate that Islamic banks are performing well in management efficiency, liquidity management and ROA than conventional banks. While, conventional banks appears to have better capital adequacy, asset quality and ROE than Islamic banks. Keywords: Islamic banks, conventional banks, Jordan, Camel rating, trend analysis. …………………………………………………………………………………………………………………………