Investigating the Performance of Islamic Banks in Bangladesh

Abstract

Around the world Islamic banking system is getting popularity gradually due to its multidimensional benefits. Consequently, many tradition banks have been converted (such as FSIBL and EIBBL) into Islamic Sharia’h based banks for the superiority of Islamic banking system. Thus, it is the curiosity of the investors, depositors, researchers and policy makers to know the performance of Islamic banks operating in Bangladesh. So, taking secondary data from the annual reports of the sample banks, the study has evaluated the performance of six Islamic banks listed at both Dhaka Stock Exchange (DSE) & Chittagong Stock Exchange (CSE) in terms of deposit; investment; foreign remittance collection; earnings per share (EPS); dividend declaration; dividend payout ratio; price earnings ratio (P/E) and net asset value (NAV). The study found that six Islamic banks have performed very well. Especially; Islami Bank Bangladesh Ltd. has shown outstanding performance in terms of every indicator. It is expected that the study will not only help the investors and depositors to make their decisions in more efficient way but also; it will motivate non-Islamic banks to convert their business mode according to Islamic Sharia’h.