(Comparison of Performance of Participation Banks with Conventional Banks: Case of 2008 Crisis Period)

Abstract

Purpose – Comparison of the performance of islamic banks and conventional banks on 2008 global financial crisis in Turkey. With this comparison, it has been determined that how İslamic banks have management approach compared to deposit banks in the crisis period. Banks' understanding of management is an indicator of how the economy is viewed by them. Design/methodology/approach – In order to compare the financial statements of four islamic banks and four conventional banks between 2006 and 2012 were analyzed with financial ratios (ratio), which is the traditional financial performance measurement method. The results were compared on graphs and trend analysis. Findings – Islamic banks had a stronger position than conventional banks in return on assets and return on equity on the crisis period. Only at the end of the period conventional banks are very close to Islamic banks in return on assets. In terms of the change in net profits, Islamic banks followed a relatively stable trend, whereas conventional banks followed a highly volatile trend. Conventional banks have achieved a very high rate of profit from Islamic banks after two financial years. Discussion – These results have shown significant similarity with the results of similar studies. The most important indicators among these were profitability indicators. The other one is that Islamic banks are in better than conventional banks in terms of non-performing loans. In addition, in different studies reported that conventional banks Credits of given during of crisis significantly decrease.