Abstract:
The purpose of this study is to analyze the conventional and Islamic
banking in Pakistan. For this study, a sample of 19 conventional banks and five
Islamic banks was selected. The CAMEL approach is used to evaluate the
performance of both conventional and Islamic banks. Ten ratios were used to
measure profitability, liquidity and credit risk. Our findings suggest that Islamic
banks are less efficient than conventional banks in asset management, management
capability and liquidity. Conventional banks have better earning capability in
terms of return on assets and overhead ratios. The analysis also shows that Islamic
banks have better capital adequacy than conventional banks.
