Analysis of Banking Sector of Kazakhstan in terms of profitability: Islamic versus Traditional Banking

Gassanova A.A. Zamanbekov D.Sh.

Abstract


The paper contribute to the research regarding the effectiveness of Islamic
banking in Kazakhstan. The comparative analysis of Islamic Banking and Conventional
Banking firmsis made. Moreover, it touch the differences of the Islamic
Banks and Conventional Banks in terms of historical origin, mobilizing of financial
resources, and ways of generating profit, operating principles, and equity structure.
Methodological base of research in given clause was made with modern
concepts Islamic banking and Islamic model of financing adequacy, asset quality,
management, earnings and liquidity as a whole. Findings of the results indicate
the mathematical model consists of a probability space, a Brownian motion and a
Poisson process. The jumps are independent and identically distributed. The approach
consists of defining a notion of risk and production instrument asset quality
in order to minimize the risk. To empirically evaluate performance of the banks,
different financial ratios are employed which are based on CAMEL framework
during the period 2011-2015. We measure performance in terms of capital adequacy,
asset quality, management, earnings and liquidity. In this work, descriptive
statistics, one-way Annova and regression analysis are used to make hypothesis
test and determine the ratio significance. Consequently, results from empirical
analysis indicate that there is difference in profitability determinants.


Keywords


Islamic banks; Conventional banks; СAMEL framework; Profitability; Regression analysis.

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References


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