Examination of Profitability between Islamic Banks and Conventional Banks in Bangladesh: A Comparative Study

Abstract

The aim of this research work is to compares the profitability of Islamic banks to conventional banks in Bangladesh. It considers reasons behind the difference in profitability. Profitability ratios: return on assets and return on equity is used to find out the superiority in terms of profitability between the two types of banks. The study includes 2nd Generation banks and annual reports for the year 2009-2011is used. The results of the study indicate that conventional banking is more profitable in Bangladesh. Adoption of certain business policies and modes of operation are the reasons behind the difference in terms of profitability as found through personal interviews conducted on bank executives from both spheres.