A Comparative Study of Stability & Consumer Confidence between Islamic & Conventional Banks in Bangladesh

Sisili Rahman

doi:10.13135/2421-2172/3184

Sisili Rahman University of Asia Pacific, Dhaka, Bangladesh

DOI: https://doi.org/10.13135/2421-2172/3184

Keywords: Islamic Bank, Conventional Bank, Stability, Consumer Confidence, Unit Root Test, Random Effect Regression

Abstract

This study exhibits a comparative analysis of consumer confidence and bank-level stability factors between Islamic and conventional banks in Bangladesh. The study finds that despite having lower liquidity Islamic banks are able to provide higher consumer confidence levels than conventional banks. Islamic banks have reported very small Non performing asset (NPA), and shown a positive and significant relationship with liquidity implying that during the crisis Islamic banks tend to take rigid risk strategies compared to conventional banks. Cost income ratio (CIR) is inversely and insignificantly related in both types of banks. As increase in cost decreases the stability of the bank, profit before tax (PBT) gives expected positive and significant relationship in all cases. Increase in PBT increases the stability and consumer confidence level but the level of significance is higher in case of Islamic banks. CC represents consumers’ confidence and shows positive result in all cases but with an exception with conventional bank in TQ factor.

Author Biography

Sisili Rahman, University of Asia Pacific, Dhaka, Bangladesh

Sisili Rahman has been working as a full time lecturer in Finance at the Business School of University of Asia Pacific, Dhaka Bangladesh (May 2016-till date). Prior to that, she worked as a Financial Analyst (Corporate Division) in the country’s one of the leading financial institutions LankaBangla Finance Limited just after the completion of her M.B.A from Department of Finance, University of Dhaka. She had done her B.B.A from the same department at University of Dhaka. Being a new academician she has started her research work very recently. She has presented a paper in International Conference on Business and Economics, 2017. Capital Market, Behavioral Finance, Portfolio Management, Financial Reporting, Banking and other Financial Services are some areas of her research interest.

Affiliation and Contact No.

Sisili Rahman

Lecturer

Department of Business Administration, University of Asia Pacific, Bangladesh

74/A, Green Road, Farmgate, Dhaka - 1215, Bangladesh

Email: sisili_du@yahoo.com

Contact: +8801766315770, +8801680916294

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