Evaluation Of Financial Performances Of Islamic Banking And Conventional Banking In Nigeria A Comparative Study

Abstract

The aim of this research is to compare the financial performances of first Islamic bank in Nigeria, i.e. JAIZ bank Plc. and conventional banks to give clear picture of Islamic banking to the stakeholder, depositors, bank managers, investors and regulator in order to give the financial position of Islamic and conventional banking in Nigeria. The study examined and compared the performance of Islamic and conventional banks in Nigeria during 2012 to 2013 by using financial ratios and financial data for the study was examined from the banks’ financial statements on bank of Nigeria website. A sample of JAIZ Islamic banks and ACCESS as a Conventional bank were selected to measure and compare their performances. The study found that JAIZ is less profitable, more solvent (less risky), and also less efficient comparing to the conventional bank but more efficient in term of operation Islamic is more promising. However, there was no significant difference in liquidity between the two banks. The reasons are due to the facts that conventional banks in Nigeria have longer history and experience in doing banking business and hold dominating position in the financial sector with its large share in the overall financial assets of Nigeria, as compared to Islamic banks, which in true sense, started and incorporated few years back. The study conclusively revealed that Islamic banking proved to be more satisfactory in future if all challenges are been taking care of.