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This paper aims to empirically analyze the efficiency of full-fledged Islamic banks, Islamic branches of conventional banks and conventional banks in Pakistan.

The paper uses data envelopment analysis to measure and compare the efficiency of banks. Three measures of efficiencies such as total technical efficiency, pure technical efficiency and scale efficiency are computed to achieve the objective of the paper.

Overall, full-fledged Islamic banks are less efficient in terms of total technical efficiency and pure technical efficiency than conventional banks. However, Islamic branches of conventional banks are highly scale-efficient than their counterparts.

The findings need to be supported by considering production function and risk exposure factors.

This paper evaluates and compares the efficiency of Islamic and conventional banks by utilizing the largest available data set during 2007-2014.

In recent years, the fast growth of Islamic banks (IBs) has generated debates among policymakers and economists about the sustainability and performance of these institutions. This paper aims to undertake a comparative analysis of the financial performance of IBs and conventional banks (CBs) in Pakistan over the period 2008–2019 to evaluate how IBs are faring compared to their conventional peers.

This paper considers Financial Ratio Analysis (FRA) to analyse and compare the performance of the top-10 IBs and CBs operating in Pakistan. The sample includes five full-fledged IBs and five CBs which offer Islamic windows in Pakistan. The top-five performing CBs offering Islamic windows have been selected in this study.

The results show that IBs are better capitalized, less risky and have higher liquidity as compared to CBs. In contrast, the profits of IBs are found to be lower than those of CBs.

The study has provided an analysis of financial performance only for Pakistan. A cross-country analysis could be more representative of the performance of IBs.

The study infers that the size of the Islamic banking industry in Pakistan should be enhanced by opening new branches and promoting Islamic financial literacy.

The study assists investors, creditors, debtors and managers in making better decisions. It also provides the latest valuable information to regulators and policymakers that can be used to make rules and policies for the finance industry in Pakistan.