Differences between the financial characteristics of interest‐free banks and conventional banks

Abstract

Uses logit, probit and discriminant analysis to test for structural differences between the financial characteristics of interest‐free banks and conventional banks. The analysis extends to various financial dimensions which evaluate performance, namely: liquidity, leverage, credit risk, profitability and efficiency. Covers 15 interest‐free banks and 15 conventional banks. The statistical evidence suggests that the two groups of banks may be differentiated in terms of liquidity, leverage and credit risk, but not in terms of profitability and efficiency.

Citation

Metwally, M.M. (1997), "Differences between the financial characteristics of interest‐free banks and conventional banks", European Business Review, Vol. 97 No. 2, pp. 92-98. https://doi.org/10.1108/09555349710162607