Comparative Analysis Between Islamic and Conventional Banking System In Term of Profitability and Governance

It is known the banking sector is play the main role in the economy in the world, whereas there are a lot of theories and studies was discussed especially after global financial crisis to explain over the Islamic banks affected by the last crisis. This research is going to comparison financial performance between Islamic banking and conventional banking in five countries. This comparison study will examine the financial performance for two different banking systems depending on the profitability ratios including Return on Equity and Return on Assets by using CAMEL approach in Malaysia, Pakistan, Egypt, Qatar and Turkey. In additional, good governance concept became an important factor recently, this paper will measure the impacts of governance factor on the profitability in Islamic and conventional banks. For this purpose, applying E-views program for estimate correlation and regression analyses to make hypotheses test then concluding the results by using F-test. The data in this research was extracted from financial annual reports of banks from 2008 to 2013. However, the results illustrate the difference of financial performance between Islamic banks and conventional banks. Keywords: Islamic Banks, Conventional Banks, Profitability and governance.