Performance Analysis of Commercial Banks in Bangladesh: A Comparison between Islamic and Conventional Banks

Abstract

Bank is an economic institution and its aim is to earn profit through exchange of money and credit instruments. It is a service oriented as well as profits oriented organization. The main concern is to analysis the financial performance of four Islamic and Conventional banks in Bangladesh for the time period 2013-2016. Five ratio dimensions like liquidity ratios, profitability ratios, solvency ratios, efficiency ratios and market ratios have been applied to measure the performance analysis of commercial banks. The main objective of Islamic bank and conventional bank is same and that is profit making. Report has been organized in four chapters. First Chapter is introduction of the study; the second part is background of the Islamic and conventional banks; third Chapter describes the analysis and interpretation of financial performances and forth chapter is the conclusion about the project. The financial performances of Conventional and Islamic banks have been measured over the period of 2013 to 2016 applying the ratio analysis techniques. Report also focuses on statistical tool of standard deviation to make sure that which banks have better outcomes compared to others. The conclusion is that although conventional banks generate more return compared to the return of Islamic banks, Islamic banks have less risk element inherent in business operations and therefore, investment is lucrative for Islamic banks rather than traditional banks.