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Article Review
November 26 2019
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Article review
profitability, liquidity
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Article review
1. Abstract
All of the necessary information required for a review was presented. In my opinion, it could have
been better if some more key words had been used. From the article reviewers’ point of view, this
article possesses most of the entire criteria that should be included in a scientific journal and all
these elements are briefly discussed as follows;
2. Introduction
This article, “Evaluating the Financial Performance of Islamic and Conventional Banks of
Pakistan: A Comparative Analysis” written by Abid Usman (Assistant Professor Sarhad
University of Science & Information Technology 36-B, Chinar Road University Town, Peshawar
Pakistan) and Muhammad Kashif Khan (Corresponding Author Lecturer Preston University
Islamabad Plot # 85 Street # 3, H-8/1 Islamabad Pakistan).
The title of the research, “Evaluating the Financial Performance of Islamic and Conventional
Banks of Pakistan: A Comparative Analysis”, matches with the content of the research. For
instance, when we see the theoretical background part, it covers about the two banking strategy
and policy. In this paper it is argued that the difference between two domains - Islamic and
conventional banks. - Plays a role in determining the Financial Performance.
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Article review
Are there particular composites of conventional and Islamic bank strategies used by firms or
investors that operate in their home market and also on the world economy? If there are,
what is the nature of these composite bank strategies?
Are there common strategic composites used by conventional and Islamic bank?
4. Objectives
4.1. General Objective
The general objective of this Article is to examine the strategic behavior of comparative financial
performance of Islamic and conventional banks, and whether that behavior impacts upon the
performance of the financial. The article is also focused on the relationship between conventional
and Islamic bank, whether this interface is affected by the national economy, and investigates the
strategy-performance comparative financial performance of Islamic and conventional banks.
4.2. Specific Objectives
The specific objectives of this study are:
To investigate the strategy-performance comparative financial performance of Islamic and
conventional banks?
Setting the above objectives helps the researcher to fulfill the gap that was not covered by
literatures.
5. Hypothesis
The following hypotheses were addressed by the study:
Some of the results obtained in the standardization/adaptation literature are applicable, it
is found that size of the banks and networking capital to net assets having positive but
insignificant relationship with liquidity risk. Whereas the capital adequacy in conventional
banks and return on asset in Islamic banks having a positive and significant relationship
with liquidity risk.
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Article review
6. Methodology/Research Design
6.1. Sampling Techniques and Population Size
In this article, the authors have relied on the data collected from an appropriate comparative study
three Islamic banks (Mezan Bank Ltd, Bank Islamic and Albaraka) and three conventional banks
(Faysal Bank, KASB and Bank of Khyber) are selected on the basis of almost having equal weight
of investing capital and number of branches during the period of 2007 to 2009 were used. The
study classifies its banks into two strata:
1. Islamic bank (aim to fulfill the teaching of Holy Quran)
2. Conventional bank (interest-based)
The researcher believes that the last criterion was imposed because it was necessary to sample
banks that were neither exclusively Islamic nor totally conventional oriented, to enable the
investigation of potential relationships between comparative financial performance of Islamic and
conventional banks.
7. Data Collection
The data for the study were collected through collected from the official website of respective
banks and the official website of state bank of Pakistan. Hence In order to see how Islamic banks
performed in comparison with the conventional banks over the period of 3 years from 2007 to
2009. By increasing the sample size and time frame of the research, will provide strong empirical
results on performance and reveal significant relationship between Islamic and conventional
banks.
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Article review
9. Results
The calculated results revealed that the profitability of the Islamic banks is more worthwhile than
conventional banks. The analysis make it clear that Islamic banks are booming rapidly than
conventional banks, except year 2007 the mean profitability of conventional banks was much
better than Islamic banks but later on 2008 and 2009 the profitability of Islamic banks is better
than conventional banks.
10. Review of References
References are properly used and discussed in the main body of the article as well as cited in
Islamic Shari’s. Comprehensive reference lists are not given in the article. Based on convention
writers are recommended to incorporate forty and above texts in their work. Unfortunately in this
article only nigh teen references are cited. The other problems with respect to references are that
most references are somehow old. Based on convention ten years back texts are considered as old
and sixteen of them were written before ten year.
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Article review
Conclusion
This study has contributed to the literature on comparative financial performance of Islamic and
conventional banks. Finally, the study has illustrated the important role played by to make an
appropriate comparative study profitability and liquidity ratios of Islamic banks and conventional
banks are used during the period from 2007 to 2009.The article emphasizes that further testing is
required of the reliability of the financial performance established in this study since they are based
on self-reporting measures only.