Comparative Financial Performance of Islamic Banks and Conventional Banks in Kenya
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Date
2013-11Author
Siat, Mohamed J
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
Banks as financial institutions play an important role in the development of an economy.
It functions as intermediary linking surplus and deficit units; facilitate funds for
productive purpose and thereby contributes to economic development. Therefore, their
financial performances are of concern to decision makers such as investors,borrowers and
savers.In Kenya, both Islamic (interest free) banks and Coventional (interest based) banks
operates offering various products and services.The study evaluated and compared
financial performance of Islamic banks and conventional banks in Kenya during year
2010 to 2012 to establish whether there are significant differences between the financial
performances of the two banking category. Data for the study were mainly extracted from
financial statements of the sampled banks where Gulf African Bank and First Community
represented the Islamic Banks while Giro Bank and K-Rep Bank represented the
conventional Banks. CAMEL model, a financial ratio based model, representing Capital
adequacy, Asset quality, Management quality, Earnings and Liquidity was employed in
analysis of the financial performances and mean ratios of each category were compared
through inter-bank analysis. Finally, T-test was carried out to establish whether there are
significant differences between the financial performances of the two banking category.
Ms-Excel was mainly used in carrying out the data analysis. The study revealed that
Conventional banks outperformed Islamic banks in overall financial performances during
the study period though there was no significant difference between the financial
performances of the two banking categories.
Citation
Degree Of Master of Business Administration (MBA)Publisher
University of Nairobi School of Business
Description
A research project submitted in partial fulfillment
of the requirements for the award of Degree of
Masters in Business Administration, University Of
Nairobi