Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine

Khaled Zedan

doi:doi:10.11648/j.ijefm.20221003.14

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Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine

Khaled Zedan

Published in International Journal of Economics, Finance and Management Sciences (Volume 10, Issue 3)

Received: 11 May 2022 Accepted: 28 May 2022 Published: 8 June 2022

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Abstract

Evaluating the performance efficiency of banks and monitoring their activity is essential to their survival in light of the rapid growth of risks facing them, since many financial crises were caused by them. Therefore, measuring banks performance by knowing their strengths and weaknesses enable regulators and managements to correct deviations before it is too late. The positive role played by the Islamic banking system cannot be ignored for financing and investment services in various financial, economic and social activities. In recent years Islamic banks were able to impose themselves to become a difficult number in the composition of the financial cycle and economic growth in the world, as evidenced by the rapid growth of these banks in all countries, Muslim and non-Muslim. This transformation is recognition of the success of the Islamic experience. This study aimed to evaluate the financial performance of Islamic and conventional banks in Palestine over the period 2017–2018 prior to the corona virus crisis using CAMEL model. The results show that there are no clear significant differences in performance between Islamic and conventional banks in Palestine during study period. Both conventional and Islamic banks have powerful and satisfactory capital levels comparative to the firm's risk profile and consistent with Palestinian Monetary Authority (PMA) regulations. In terms of asset quality, Islamic banks kind of are better in managing their asset portfolio than conventional banks which considered less risky. However, there were no significant differences in profitability ratios, liquidity ratios and efficiency ratios.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 10, Issue 3)
DOI	10.11648/j.ijefm.20221003.14
Page(s)	114-121
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

CAMEL Model, Efficiency, Asset Quality, Liquidity, Islamic Banks, Conventional Banks, Palestine, Comparative Analysis

References

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APA Style

Khaled Zedan. (2022). Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine. International Journal of Economics, Finance and Management Sciences, 10(3), 114-121. https://doi.org/10.11648/j.ijefm.20221003.14

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ACS Style

Khaled Zedan. Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine. Int. J. Econ. Finance Manag. Sci. 2022, 10(3), 114-121. doi: 10.11648/j.ijefm.20221003.14

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AMA Style

Khaled Zedan. Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine. Int J Econ Finance Manag Sci. 2022;10(3):114-121. doi: 10.11648/j.ijefm.20221003.14

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@article{10.11648/j.ijefm.20221003.14,
  author = {Khaled Zedan},
  title = {Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {10},
  number = {3},
  pages = {114-121},
  doi = {10.11648/j.ijefm.20221003.14},
  url = {https://doi.org/10.11648/j.ijefm.20221003.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20221003.14},
  abstract = {Evaluating the performance efficiency of banks and monitoring their activity is essential to their survival in light of the rapid growth of risks facing them, since many financial crises were caused by them. Therefore, measuring banks performance by knowing their strengths and weaknesses enable regulators and managements to correct deviations before it is too late. The positive role played by the Islamic banking system cannot be ignored for financing and investment services in various financial, economic and social activities. In recent years Islamic banks were able to impose themselves to become a difficult number in the composition of the financial cycle and economic growth in the world, as evidenced by the rapid growth of these banks in all countries, Muslim and non-Muslim. This transformation is recognition of the success of the Islamic experience. This study aimed to evaluate the financial performance of Islamic and conventional banks in Palestine over the period 2017–2018 prior to the corona virus crisis using CAMEL model. The results show that there are no clear significant differences in performance between Islamic and conventional banks in Palestine during study period. Both conventional and Islamic banks have powerful and satisfactory capital levels comparative to the firm's risk profile and consistent with Palestinian Monetary Authority (PMA) regulations. In terms of asset quality, Islamic banks kind of are better in managing their asset portfolio than conventional banks which considered less risky. However, there were no significant differences in profitability ratios, liquidity ratios and efficiency ratios.},
 year = {2022}
}

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TY  - JOUR
T1  - Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine
AU  - Khaled Zedan
Y1  - 2022/06/08
PY  - 2022
N1  - https://doi.org/10.11648/j.ijefm.20221003.14
DO  - 10.11648/j.ijefm.20221003.14
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 114
EP  - 121
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20221003.14
AB  - Evaluating the performance efficiency of banks and monitoring their activity is essential to their survival in light of the rapid growth of risks facing them, since many financial crises were caused by them. Therefore, measuring banks performance by knowing their strengths and weaknesses enable regulators and managements to correct deviations before it is too late. The positive role played by the Islamic banking system cannot be ignored for financing and investment services in various financial, economic and social activities. In recent years Islamic banks were able to impose themselves to become a difficult number in the composition of the financial cycle and economic growth in the world, as evidenced by the rapid growth of these banks in all countries, Muslim and non-Muslim. This transformation is recognition of the success of the Islamic experience. This study aimed to evaluate the financial performance of Islamic and conventional banks in Palestine over the period 2017–2018 prior to the corona virus crisis using CAMEL model. The results show that there are no clear significant differences in performance between Islamic and conventional banks in Palestine during study period. Both conventional and Islamic banks have powerful and satisfactory capital levels comparative to the firm's risk profile and consistent with Palestinian Monetary Authority (PMA) regulations. In terms of asset quality, Islamic banks kind of are better in managing their asset portfolio than conventional banks which considered less risky. However, there were no significant differences in profitability ratios, liquidity ratios and efficiency ratios.
VL  - 10
IS  - 3
ER  -

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Khaled Zedan

Department of Banking and Finance, Faculty of Economics and Social Studies, An-Najah National University, Nablus, Palestine

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APA Style

Khaled Zedan. (2022). Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine. International Journal of Economics, Finance and Management Sciences, 10(3), 114-121. https://doi.org/10.11648/j.ijefm.20221003.14

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ACS Style

Khaled Zedan. Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine. Int. J. Econ. Finance Manag. Sci. 2022, 10(3), 114-121. doi: 10.11648/j.ijefm.20221003.14

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AMA Style

Khaled Zedan. Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine. Int J Econ Finance Manag Sci. 2022;10(3):114-121. doi: 10.11648/j.ijefm.20221003.14

Copy | Download

@article{10.11648/j.ijefm.20221003.14,
  author = {Khaled Zedan},
  title = {Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {10},
  number = {3},
  pages = {114-121},
  doi = {10.11648/j.ijefm.20221003.14},
  url = {https://doi.org/10.11648/j.ijefm.20221003.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20221003.14},
  abstract = {Evaluating the performance efficiency of banks and monitoring their activity is essential to their survival in light of the rapid growth of risks facing them, since many financial crises were caused by them. Therefore, measuring banks performance by knowing their strengths and weaknesses enable regulators and managements to correct deviations before it is too late. The positive role played by the Islamic banking system cannot be ignored for financing and investment services in various financial, economic and social activities. In recent years Islamic banks were able to impose themselves to become a difficult number in the composition of the financial cycle and economic growth in the world, as evidenced by the rapid growth of these banks in all countries, Muslim and non-Muslim. This transformation is recognition of the success of the Islamic experience. This study aimed to evaluate the financial performance of Islamic and conventional banks in Palestine over the period 2017–2018 prior to the corona virus crisis using CAMEL model. The results show that there are no clear significant differences in performance between Islamic and conventional banks in Palestine during study period. Both conventional and Islamic banks have powerful and satisfactory capital levels comparative to the firm's risk profile and consistent with Palestinian Monetary Authority (PMA) regulations. In terms of asset quality, Islamic banks kind of are better in managing their asset portfolio than conventional banks which considered less risky. However, there were no significant differences in profitability ratios, liquidity ratios and efficiency ratios.},
 year = {2022}
}

Copy | Download

TY  - JOUR
T1  - Comparative Analysis of Financial Performance of Islamic vs. Conventional Banks Using CAMEL Model: Evidence from Palestine
AU  - Khaled Zedan
Y1  - 2022/06/08
PY  - 2022
N1  - https://doi.org/10.11648/j.ijefm.20221003.14
DO  - 10.11648/j.ijefm.20221003.14
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 114
EP  - 121
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20221003.14
AB  - Evaluating the performance efficiency of banks and monitoring their activity is essential to their survival in light of the rapid growth of risks facing them, since many financial crises were caused by them. Therefore, measuring banks performance by knowing their strengths and weaknesses enable regulators and managements to correct deviations before it is too late. The positive role played by the Islamic banking system cannot be ignored for financing and investment services in various financial, economic and social activities. In recent years Islamic banks were able to impose themselves to become a difficult number in the composition of the financial cycle and economic growth in the world, as evidenced by the rapid growth of these banks in all countries, Muslim and non-Muslim. This transformation is recognition of the success of the Islamic experience. This study aimed to evaluate the financial performance of Islamic and conventional banks in Palestine over the period 2017–2018 prior to the corona virus crisis using CAMEL model. The results show that there are no clear significant differences in performance between Islamic and conventional banks in Palestine during study period. Both conventional and Islamic banks have powerful and satisfactory capital levels comparative to the firm's risk profile and consistent with Palestinian Monetary Authority (PMA) regulations. In terms of asset quality, Islamic banks kind of are better in managing their asset portfolio than conventional banks which considered less risky. However, there were no significant differences in profitability ratios, liquidity ratios and efficiency ratios.
VL  - 10
IS  - 3
ER  -

Copy | Download