TY  - CHAP
AB  - AbstractPurpose – This research analyses the stability of a number of banks operating in Malaysia by using descriptive statistical analysis based on internal variables. These include the characteristics of the bank, capital adequacy ratio, ratio of profitability, liquidity ratio and the ratio of bank operations.
Methodology/approach – Each bank’s stability is studied using z-score analysis. Data are sourced from the balance sheets and income statements of the banks from 2000 to 2011.
Findings – The results indicate that characteristics of a bank do influence a bank’s performance. There are significant differences in financial ratios between Islamic and conventional banking. Islamic banks provide a lower loan loss of capital to cover impaired loans than conventional banks. This provides high capital based on the mean value obtained. The capital ratio allows both sets of banks to meet the capital adequacy ratio set by the Central Bank of Malaysia. Meanwhile, in profitability ratios, conventional banks have higher returns on higher assets, whereas Islamic Banking has higher returns on higher equity. Only 8 Islamic banks and 11 conventional banks are highly stable banking institutions in Malaysia.
Originality/value – Islamic and conventional banking systems in Malaysia need further improvement to deal with unexpected economics crises and increased competition between the two. Hence, Islamic banking must be refined, especially for improving their stability to attract more investments for further development and performance.
SN  - 978-1-78756-283-7, 978-1-78756-284-4/
DO  - 10.1108/978-1-78756-283-720181013
UR  - https://doi.org/10.1108/978-1-78756-283-720181013
AU  - Sulaiman @ Mohamad Ahmad Azam
AU  - Mohamad Mohammad Taqiuddin
AU  - Hashim Siti Aisyah
ED  - Asmak Ab Rahman
PY  - 2018
Y1  - 2018/01/01
TI  - Islamic Versus Conventional Banking
T2  - New Developments in Islamic Economics
PB  - Emerald Publishing Limited
SP  - 119
EP  - 214
Y2  - 2024/04/16
ER  -