Analysis Paper on Islamic Bank(Meezan Bank)

 Research Conventional paper on Islamic BankMeezan Bank

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Vol. four, No . 1; Jan 2012

AN EMPIRICAL STUDY OF RELATIVE PERFORMANCE USING

FRONTIER ANALYSIS STRATEGY – A CASE OF ISLAMIC

BANKS

Khizer Ali (Corresponding author)

Hailey College of Commerce, University or college of the Punjab, Lahore, Pakistan Tel: +923458800015 Email: [email protected] com

Muhammad Farhan Akhtar

Hailey College or university of Business, University of the Punjab, Lahore, Pakistan Tel: +923464666786Email: [email protected] com

Shama Sadaqat

Hailey College of Commerce, College or university of the Punjab, Lahore, Pakistan Email: [email protected] com

Abstract

The study aims to investigate the relative performance of Islamic banks of Pakistan intended for the period 20072010. Data envelopment analysis is used with an input minimization approach to measure the efficiency of Islamic banks. The benefits reported that for the period under analyze, only one Islamic bank reveals the consistency in its performance level with efficiency score 1, i. e. Meezan Bank Limited the most well-known Islamic traditional bank in Pakistan. Although Islamic banking in Pakistan continues to be in its preliminary stages, which can be observed from your continuous deficits from previous years, Islamic banks are found to be comparatively efficient with the passage of time. So far as total assets are concerned, the regression results reviews insignificant relation with technical efficiency. It implies that the technical efficiency does not depend entirely upon total assets of the banks. Keywords: Islamic banking companies; Efficiency; Data Envelopment Examination; Pakistan 1 ) 0 INTRODUCTION

Islamic bank represents a radical departure from conventional banking, and from the standpoint of corporate governance; it embodies numerous interesting features since collateral participation, risk and profit-and-loss sharing plans form the basis of Islamic auto financing. Using econometric techniques, this paper gives valuable ideas as to the stableness of Islamic banks as well as the factors accountable for the growth of smaller such institutions that has been witnessed within the last decade.

Around the world over 150 Islamic banks are working, which includes commercial to investment financial institutions and Islamic leasing to insurance companies. The Islamic financial system engages the concept of participation, taking advantage of the money on a profit-and-loss-sharing basis inside Shariah guidelines(Masood, Niazi, & Ahmad, 2011). The Islamic financial system employs the concept of involvement in the venture, utilizing the

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Volume. 4, No . 1; January 2012

money at risk over a profit-and-loss-sharing basis. In Pakistan efforts for the promotion of Islamic banking first start in 1970s after which realistic methods were consumed in early 2001s. Since you will find relatively handful of studies carried out in this area, specifically among Islamic banks in Pakistan, this kind of study will certainly broaden the scope with the literature by providing innovative scientific evidence. installment payments on your 0 BOOKS REVIEW

Rosly and Bakar (2003) set up that Islamic banking system (IBS) possess evidenced outstanding return upon assets (ROA). Pasiouras and Kosmidou (2007) explored the bank explicit features and the factors affecting earnings of banking institutions in the total banking environment. The study researched the foreign and domestic banking institutions operating in 12-15 European Union countries for the period 1995-2001. The research established which the profitability of both home and foreign banks not simply affects by banks specific characteristics nevertheless also there is a significant role of macroeconomic conditions as well as the structure of economic markets. In addition the study found explanatory benefits of domestic possessed banks is more than the explanatory power of overseas owned banking institutions (in conditions of R2). Dusuki and Abdullah (2007); Ghayad (2008) examined the factors that motivated clients to deal with Islamic banks. Using self-administered forms from Malaysia the...

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