ISSN 2394-5125
 

Research Article 


Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan

Mohammad Omar Alzghoul, Prof. Dr. Hatice Jenkins.

Abstract
Different conventional banks, whose main purpose is to maximize loan-based profit, comply with Islamist law
(Shariah), which strictly prohibits the use of interest. Due to the precise feature of Islamic banks, many doubted
when the first Islamic banks were established, since interest-free banking cannot surpass it. Even so, Islamic banks
are still one of the most rapidly growing financial industries. Interest free banking does not mean banking without
profit, but a more stable and safe ethical alternative, since instead of interest, Islamic banks receive fees and
commissions, share profit(loss) with their customers, and are protected by contracts.
This study analyzes the performance of Islamic and conventional banks in Jordan in comparison. This study will
also address the differences in the profitability and safety of Islamic banks and conventional banks. This
comparative study mainly focuses on assessing and measuring the financial performance differences of the two
different banking companies operating in Jordan. For data analysis purposes, the researcher has chosen a sample of
two Islamic and three conventional banks and used the CAMEL rating to compare the performance of both banks.
Between 2005 and 2011, the analysis covered seven years. Trend analysis will also examine how Islamic and
conventional banks' performance has changed over the past seven years. The results of these studies indicate that
Islamic banks perform well as conventional banks in management efficiency, liquidity management and ROA. In
contrast, conventional banks seem to be more adequate in capital, asset quality and ROE than Islamic banks.

Key words: Islamic banks, conventional banks, Jordan, CAMEL rating, Profitability ratio, trend analysis


 
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How to Cite this Article
Pubmed Style

Mohammad Omar Alzghoul, Prof. Dr. Hatice Jenkins. Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan. JCR. 2021; 8(2): 573-586. doi:10.31838/jcr.08.02.61


Web Style

Mohammad Omar Alzghoul, Prof. Dr. Hatice Jenkins. Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan. http://www.jcreview.com/?mno=74612 [Access: May 31, 2021]. doi:10.31838/jcr.08.02.61


AMA (American Medical Association) Style

Mohammad Omar Alzghoul, Prof. Dr. Hatice Jenkins. Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan. JCR. 2021; 8(2): 573-586. doi:10.31838/jcr.08.02.61



Vancouver/ICMJE Style

Mohammad Omar Alzghoul, Prof. Dr. Hatice Jenkins. Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan. JCR. (2021), [cited May 31, 2021]; 8(2): 573-586. doi:10.31838/jcr.08.02.61



Harvard Style

Mohammad Omar Alzghoul, Prof. Dr. Hatice Jenkins (2021) Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan. JCR, 8 (2), 573-586. doi:10.31838/jcr.08.02.61



Turabian Style

Mohammad Omar Alzghoul, Prof. Dr. Hatice Jenkins. 2021. Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan. Journal of Critical Reviews, 8 (2), 573-586. doi:10.31838/jcr.08.02.61



Chicago Style

Mohammad Omar Alzghoul, Prof. Dr. Hatice Jenkins. "Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan." Journal of Critical Reviews 8 (2021), 573-586. doi:10.31838/jcr.08.02.61



MLA (The Modern Language Association) Style

Mohammad Omar Alzghoul, Prof. Dr. Hatice Jenkins. "Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan." Journal of Critical Reviews 8.2 (2021), 573-586. Print. doi:10.31838/jcr.08.02.61



APA (American Psychological Association) Style

Mohammad Omar Alzghoul, Prof. Dr. Hatice Jenkins (2021) Performance Analysis of Conventional Banks Vs. Islamic Banks in Jordan. Journal of Critical Reviews, 8 (2), 573-586. doi:10.31838/jcr.08.02.61