World Academic Journal of Business & Applied Sciences-Journal of Economics & Finance-Vol.1 No.

2 (2013)
Available on: http://wajbas.webs.com/

Journal of Economics & Finance (2013)

Journal of
Economics & Finance

Does Islamic Banking Have Any Future? A Comparative Study

Ammar Ali Gull (Corresponding author)
MBA/ MS (Banking & Finance)
GC University Faisalabad, Pakistan

Rehan Nasir
MBA/ MS (Banking & Finance)
GC University Faisalabad, Pakistan

Muhammad Bilal
MBA/ MS (Banking & Finance)
GC University Faisalabad, Pakistan

Asad Zaman
MBA/ MS (Banking & Finance)
GC University Faisalabad, Pakistan

Saqib Iqbal
MBA/ MS (Banking & Finance)
GC University Faisalabad, Pakistan

World Academic Journal of Business & Applied Sciences-Journal of Economics & Finance-Vol.1 No.2 (2013)

Abstract
The purpose of this research was to assess the future growth of Islamic banking. Study is based on comparative
analysis of both interest and Sharia based banks listed at Karachi stock exchange over the period of 2007 to 2011 by
applying regression analysis. Financial data regarding key performance indicators of banking industry was collected
from websites of KSE, State bank of Pakistan and sample banks. Findings of analysis suggested that performance of
non-interest banks is much better as compare to conventional banks of Pakistan. Key difference is that Islamic banks
are promoting equity financing on the other hand lending procedure of conventional banks is totally based on debt
financing. Return on assets for Islamic banks is higher than conventional banks, it represents that working style of
these banks is efficient than interest base banks. In nutshell Islamic banks had bright future within banking industry
of our country.

Key Words: Islamic Banks, Conventional Banks, Return on Assets and Return on Equity.

1., INTRODUCTION
Islamic and conventional banks both are operating for providing financial intermediary services. Financial
intermediary mean that banks working for two types of customers. First are those who need money to meet their
expenditures because their expenditures are higher than their income. Thats why they need more money in shape of
further capital or borrowing. Banks provide facility of lending to customers meeting their needs easily without
effecting the operations of business. Second type of customers has income higher than their expenditures. So they
have surplus money after meeting their expenditures and those deposit surplus money in banks. Banks use this
surplus money for lending purpose to needy customers, who have higher expenditures than income for fulfilling
their needs. So banks are working as middle men and take commission from borrowing customer and pay to
depositing customer according to their packages and provide many more financial facilities.
Interest free banking system is fully based on Islamic rules and its banking operations are performed in accordance
with Islamic principles and its functional utilization was continued by creating Islamic economic system. In the era
of 1940 Islamic banks intensified their growth and became a new rival in banking sector. Islamic banking reached its
peak level and expanded in all Muslim and non-Muslims countries. Islamic banks became an alternative for
economy and majority of countries were adapting to Islamic banking.
Within few decades the Islamic economy concept rapidly promoted in four continents likes Asia, Africa, Europe and
North America. Presently approximately 300 financial institutions are working as Islamic banks in 70 countries of
world and their investment reached up to $500 Billion to $800 Billion. In recent era Islamic banks are having $4
trillion market value. In Arab countries this concept has become a popular economic concept. Bahrain is from those
countries who rapidly adopted Islamic economic system and Malaysia is on second due its excellent policies
regarding Islamic banking. In Pakistan Islamic banks had 7% market participation and six Islamic banks are
operating in Pakistan.
Conventional Banking is fully based on financial model which follow capitalistic economy, in this system banks
mainly borrow from Savers who have surplus money and lend to enterprises or individuals who need money for
meeting their needs. In conventional banks the profits of banks is interest spread which is difference among interest
earning and interest expenses. In this system banks also gain revenue from secondary sources by providing services
for international trading such as letter of credit and letter of guarantee. In these transactions they work as middle

World Academic Journal of Business & Applied Sciences-Journal of Economics & Finance-Vol.1 No.2 (2013)

men between exporters and importers and receive commission. Financial sector of Pakistan consist of conventional
banks including domestic and foreign, financial institution, Islamic banks, insurance companies and stock exchange.
In furthermore, although interest free base and conventional banks are operating in the same intermediation function,
the basis utilized by Islamic Banks is the profit or revenue sharing principle, differ from conventional banks that
based on market interest. The revenue sharing basis might influence the Islamic banks capital structure. The
efficient working of banking operations contributes in economic growth of country because banks play a major and
vital role as financial intermediaries. Banks in Pakistan provide financial services and demand commission as
reward for these services. Important point is that the funding of banks is financed by deposits the expense of which
is also interest rate. Margin of banks profit is the difference between the amount earned as interest from lenders and
amount paid to depositors.
1.1, Problem statement
Banking industry promotes saving and investment activities for growth of business and trade activities in country.
Pakistani banking sector had experienced worst changes in six decades of its life. The start of Islamic banking
created a competitive environment for banking sector especially for conventional banks due to its rapid growth in
Pakistan. This study will investigate the service quality of banks and its effect on proficiency of interest based and
interest free baking.
1.2, Objectives of study
Following are the major purposes of this research.
1.
2.
3.

To describe the concept of Islamic banking.

Performance comparison of Islamic and conventional banks operating in Pakistan.
To measure the performance efficiency and growth of Pakistans banking sector.

2. Literature Review
The study of Jaffar and Manarvi (2011) showed the effectiveness and efficiency of conventional and Islamic banks
working in Pakistan by using CAMEL technique and its sub factors such as capital structure, asset management of
banks, efficiency of management, earnings and effective liquidity of banks. Financial data used for financial
evaluation of Islamic and conventional banks was collected from financial statements of banks. Financial statements
were available on websites of concerned bank and State Bank of Pakistan. CAMEL technique was used for
assessing financial proficiency of banks. The paper concluded that the conventional banks were founder of banking
and had excellent earning ability and Islamic banks were more dependent on equity finance rather than debt finance
and also active in liquidity. Asset quality management among the banks was almost similar.
The purpose of this paper written by Qureshi and Shaikh (2012) was to analyze the relevant proficiency of Pakistani
banking sector, which consist of Islamic and conventional banks. For this determination they used two techniques
for assessment, first one was financial ratios to evaluate the production and revenue efficiency and second was
envelopment analysis for relevant analysis of banks. They find out that Islamic banks were able to overcome on cost
for banking services and have less ability to generate efficient income. They claimed that Islamic Banks could be
fortified to become an outstanding leader in financial sector by decreasing banks wastage than conventional banks.
The study of Shahid, Rehman and Raoof (2010) evaluated the competency of Islamic banks and conventional banks
in Pakistan. History of conventional banks in Pakistan from last sixty years was compared with Islamic banks.
Islamic banks had short term history in Pakistan and less than seven Islamic banks which are following fully Islamic
rules. For conducting research total ten banks were selected which includes five Islamic and five conventional banks
from 2005 to 2009. A DEA model was functional to assess the extra outcomes of banking industry. The fallouts

World Academic Journal of Business & Applied Sciences-Journal of Economics & Finance-Vol.1 No.2 (2013)

were presented that the TE of interest base banks was favorable but in CE and AE both factors were describing that
there was a heavy rivalry.
Ansari and Rehman (2011) described the financial efficiency of Pakistani Islamic and interest base banks. For this
description they considered five interest free and five interest base banks. Key measurement element was return on
total assets and with other helping factors assessment of banking sector was done. The research presented a unique
aspect of financial service provider firms which were working as middle men between lender and borrower in
Pakistan. Profitability assessment measure was same for both types of banks. At the end of study, they finalized that
Islamic banks were providing excellent results than interest base banks and furthermore Islamic banks had bright
opportunity and capacity for market share.
Bilal, Saeed, Gull and Akram (2013) conducted a study to investigate the impact of bank related and
macroeconomic factors on performance of banks. Findings of their research revealed that net interest margin have a
favorable impact on ROA and ROE, while return on equity is adversely affected by inflation and non performing
loans to total advances ratio.
The study of Siraj and Pillai (2012) compared the output of Islamic and non-Islamic banks which were working in
gulf and Arab countries for last five years. They said that assessment factors had similarity for Islamic and
conventional banks which were established in Arab countries. For this comparative measurement six interest base
and six interest free banks were selected. In this study the return on equity, return on total assets, operating income,
operating expenses, deposits to total equity and net profit were used as performance indicators. They examined that
Islamic banks were more dependent on owners equity than debt financing but conventional banks like debt
financing. Interest base banks growing well but they did not achieve desired outcomes due to increase in unsecured
loans. The study notifies that evaluating elements may be affected due to financial crises for the year 2007.
Research of Syafri (2012) analyzed the factors affecting profitability of commercial banks in Indonesia. Secondary
data of commercial banks listed on the Indonesia Stock Exchange between 2002 and 2011 was used for analysis.
Banks profitability was measured by return on assets as a function of banks specific determinants. Analysis
technique used was pooling data regression model. The empirical results showed that loan to total assets; total equity
to total assets, loan loss provision to total loan had positive effect on profitability, while inflation rate, the size of
bank and cost-to-income ratio (BOPO) had a negative effect on profitability. Economic growth and non-interest
income to total assets had no effect on bank profitability.
Gull, Akram, Bilal and Muzaffar (2013) studied the importance of board independence in banking sector of Pakistan.
Outcomes of analysis suggested that banks with independent board structures have outperformed the banks having
dependent boards.
In this article Safiullah (2010) emphasized on the financial performance analysis of both stream of banks to measure
superiority and efficiency. The study indicated that liquidity efficiency, financial structure, surviving in economy
and participation in operations were notable. The outcomes were based on economic obligations, optimal
productivity and attractive services revealed that interest base banks were operating well than Islamic banks.
However Islamic banks efficiency was reward able in banking growth and profitability than interest base banks.
After comparative research the results suggested that Islamic banks were growing rapidly.
Basic theme of study conducted by Saeed, Gull and Rasheed (2013) was to assess the impact of capital structure on
banking performance of Pakistan. Study was conducted by applying regression analysis on a sample of 25 banks
listed at KSE over the period of 2007 to 2011. Results of study revealed a positive relationship between performance
of Pakistani banks and measures of capital structure.
Samad (2004) captured the efficiency results of interest free and interest base banks of Bahrain during the Gulf war.
He also evaluated leverage, liquidity and operation of banks. He used financial ratios for assessment of services. He

World Academic Journal of Business & Applied Sciences-Journal of Economics & Finance-Vol.1 No.2 (2013)

applied students financial statement analysis projects on Bahrain banks for ten years trend analysis. The paper
finalized that interest base banking and Islamic banking have minor difference in liquidity, efficiency and services.
But his investigation revealed that there was a fundamental difference in lending of both banks.
The study of Viverita (2012) was aimed to evaluate the efficiency of Indonesian Islamic banks by using individual
banking data for the last 4 years. He used different financial ratios such as cost, revenue and profit efficiency ratios.
He observed that Islamic banks have impressive improvement within banking sector. He examined in his research
with the help of T-test and F-test that Islamic bank had high cost of production than interest based banks.
Furthermore, he investigated that Islamic banks were more active and efficient in their operations than commercial
banks and earned more dividend. He lastly described that the profitability of large scale Islamic banks was much
better than the huge conventional banks.
Awan (2009) observed that in discouraging global financial conditions, Islamic banking has become an outstanding
substitute for financial market. It had noticed the rapid growth within two decades. He conducted a vertical analysis
of Islamic banking and then compared it with commercial banks. For the purpose of study he selected new Islamic
and commercial banks for the sake of assessment. Primary and secondary data resources were used for
measurement of efficiency of banks for 3 years. He used different ratios to analyze the performance of both kinds of
banks.
Islamic Banks were working on the profit or revenue sharing principle, which was different from conventional banks
that were based on market interest. The profit /revenue sharing basis might influence the Islamic banks capital
structure but it was also helpful in international banking crises to reduce capital risk. Mostly conventional banks
have defaulted due to high liquid liabilities but Islamic banks survived in worst conditions due its unique capital
structure.
3. Data and methodology
Data for the purpose of this research is collected from secondary sources such as websites of Karachi Stock
Exchange (KSE), State Bank of Pakistan (SBP) and concerned banks for the period of five years from 2007 to 2011.
This five years period was selected because during this period banking sector passed through worst economic
conditions. Five Islamic banks and five conventional banks were selected as sample from the banking sector of
Pakistan. All these banks are well known, listed at KSE and have a big market share. For analysis of data collected
from above mentioned sources descriptive statistics, correlation and regression analysis are applied as Statistical
techniques.
3.1, INDEPENDENT VARIABLES
3.1.1, Capital Adequacy Ratio (CAR)
It is an indicator which measures the strength of banks capital. It shows the risk weight of credit exposure. CAR
ratio is very useful for checking the capital of financial institutions.

3.1.2, Return on Equity (ROE)

This ratio is used to measure the return of total capital of a company. ROE is calculated by using firms net profit
and total equity finance. ROE is shown in percentage.

3.1.3, Deposits to Total Assets Ratio (DTAR)

DTAR shows the credit standing of bank by considering relationship between deposits and total assets of banks.

World Academic Journal of Business & Applied Sciences-Journal of Economics & Finance-Vol.1 No.2 (2013)

3.1.4.

Advances Turnover Ratio (ATR)

Advances turnover represent that how much interest is earned from total advances of bank. It is a useful measure to
check the efficiency of bank performance

3.1.5.

Net spread ratio (NSR)

Spread ratio is used to measure the net interest income earned by a bank. This ratio represents the basic income of
banks.

3.2, DEPENDENT VARIABLES

3.2.1, Return on Assets (ROA)
ROA is a performance indicator that is used to measure the efficiency of total assets of a company. ROA is obtained
with the use total average asset of bank and net profit after tax, ROA is shown as a percentage. Sometimes its
written as investment on total assets of bank.

3.3, Hypothesis
Ho: Islamic banks are performing better than interest base banks.
H1: Conventional banking institutions are performing efficiently than Islamic banks.
3.4, Empirical model
Yit = 0 + Xit + it
Return on Assets
ROAit = 0it+ 1CARit + 2NSRit + 3ATRit+ 4DTARit + 5ROEit + it
Where:
Yit

is dependent variable.

represents the intercept.

Xit

is independent variable.

it

are the error terms.

is number of banking companies and

is number of years.

4., Results and Discussions

This segment explains the statistical results of variables related to study. This section consists of group statistics,
correlation and regression analysis of variables and furthermore theoretical discussion on outcomes of these tests.
4.1, Group Statistics
Table- 1 and 2 are used to describe the 5 years summary of statistical analysis for Islamic and non-Islamic banks.
Combined descriptive statistics of both banks are presented in table- 3. In Islamic and non-Islamic banks mean,
median and standard deviation of the dependent variable ROA is -0.3496, -3.1972 0.02, 1.21 and 1.446543,
21.48512 respectively. Return on assets of Islamic banks is better and more consistent than conventional banks. In
Islamic and conventional banks ROE, NSR, DTAR, CAR and ATR are independent variables and their means, are

World Academic Journal of Business & Applied Sciences-Journal of Economics & Finance-Vol.1 No.2 (2013)

2.46,11.18, 47.7252,37.5244 72.3556,76.1204 23.9012,14.1096 and 14.2088,16.4168 respectively. In case of

Islamic banks Mean of independent variables NSR and CAR are higher than conventional banks but ROE, DTAR
and ATR are lower than conventional banks. Standard deviation of ROE, NSR, DTAR, CAR and ATR (independent
variables) for interest free and interest base banks are 8.979317,27.46183 10.79265,20.10444 13.03161,6.946273
13.73281,7.77835 and 6.91089,3.775496 respectively. Islamic banks SD is less as compare to conventional banks
which shows that Islamic banks are performing well than interest based banks. Minor fluctuations in standard
deviation are suggesting that Islamic banks are more consistent than conventional banks.
4.2, Correlation Analysis
Table-4 and 5 represents the correlation matrix of the independent variables for Islamic and conventional banks.
Correlation research is a statistical technique which is used to check the multi co linearity among independent
variables. When Correlation is positive then values will move in same direction but when they move in opposite
direction correlation is negative.
Islamic banks ROE has a positive relation with NSR, DTAR and ATR but a negative association with CAR.
Conventional banks ROE having a favorable relationship with NSR, CAR and ATR, while negatively related with
DTAR. Islamic banks NSR is negatively correlated with all variables except CAR. Non-Islamic banks NSR is
found to have a positive dependence upon CAR and ATR. NSR and DTA are adversely correlated. DTAR of
interest free an interest based banks is positively associated with ATR and negatively related with CAR. Islamic
banks CAR have a positive correlation with NSR but it is negatively associated with ROE and DTA. Conventional
banks CAR have Positive correlation with NSR and ROE but it is negatively associated with DTAR. In correlation
matrix Islamic banks ATR is positively related with ROE, DTAR and CAR and negatively related to NSR.
Conventional banks ATR having an optimistic relationship with all independent variables except CAR.
Table- 6 illustrates the combine correlation analysis of Islamic and non-Islamic banks. ROE is having a favorable
connection with all independent measures other than CAR. NSR is negatively associated with DTAR and ATR but
favorably related to CAR. DTAR have an adverse relationship with CAR and positively correlated to ATR. Finally
CAR and ATR are correlated in same direction.
4.3, Regression Results
Outcomes of regression analysis of both banks are separately given in Table-7. According to results demonstrated in
above mentioned table ROE of non-interest based banks has a positive significant impact on dependent variable
(ROA) and all other variables have an insignificant relationship with ROA. R squared of dependent variable for
Islamic banks is 0.671548, which means 67% of sample describes ROA and its F statistics is 7.769405. In case of
Conventional banks ROE and CAR are favorably associated with ROA. NSR, DTAR and ATR are having a
negative insignificant impact on ROA. R square and F statistics of conventional banks are 0.807808, 15.97187
respectively.
Combined results of regression test are elaborated in Table-8. Except ROE all other independent variables are
having an insignificant impact on dependent variable and ROE has a strong positive association with ROA. R square
and F statistics of combined regression model are 0.632108 and 15.1201.
5. Conclusion
This research is conducted on the basis of comparative analysis of both banking approaches. First one is Islamic
banking based on Sharia guidelines and other is Non-Islamic based on manmade principles. Conventional banking
institutions are working in Pakistan from four to five decades and having penetration in their services concern.
Islamic banks started their operations recently but their position in banking industry is satisfactory. Banks working
in accordance of Islamic principles are outperforming conventional banks in recent financial crises. One logical

World Academic Journal of Business & Applied Sciences-Journal of Economics & Finance-Vol.1 No.2 (2013)

reason is that Islamic banks are not dependent upon debt finance like conventional banks. This is an edge for Islamic
banks over conventional banking institutions that they rely on equity financing rather than debt financing. Finally it
is reduce banks investment risk. This edge is very helpful for Islamic banks to survive in international financial
crises.
As per findings of this study in Pakistan Islamic banks are performing better than interest base banks. Return on
Assets of Islamic banking is at optimal level and supportive than conventional banking organizations. Islamic banks
CAR ratio is too good that is an indication of low risk and secured financing. Conventional banks deposit to asset
ratio is very attractive for potential customers and also higher than non-conventional banks. It means conventional
approach majorly relies on debt financing and in contrast Islamic banks are dependent upon equity financing. Over
all Islamic banks have higher growth rate in banking industry as compare to conventional banks.
References
1.

2.
3.

4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

Ansari, S., & Rehman, K. (2011). Comparative Financial Performance of existing Islamic Banks and
Contemporary Conventional Banks in Pakistan. Paper Presented at second International Conference on
Economics, Business and Management, IPEDR 22, 45-49.
Awan, A. G. (2009). Comparison of Islamic and conventional banking in Pakistan. Proceedings second
CBRC, Lahore- Pakistan. 1-36.
Bilal, M., Saeed, A., Gull, A. A., & Akram, T. (2013). Influence of Bank Specific and Macroeconomic
Factors on Profitability of Commercial Banks: A Case Study of Pakistan. Research Journal of Finance and
Accounting, 4(2), 117-126.
Gull, A. A., Akram, T., Bilal, M., & Muzaffar, Z. (2013). Do Board Independence Carry Value? (A Case
Study of Pakistani Banks). Research Journal of Management Sciences, 2(5), 1-5.
Jaffar, M., & Manarvi, I. (2011). Performance comparison of Islamic and Conventional banks in Pakistan.
Global Journal of Management and Business Research, 11(1), 60-66.
Qureshi, M. A., & Shaikh, M. (2012). Efficiency of Islamic and Conventional Banks in Pakistan: A Nonparametric Approach. International Journal of Business and Management, 7(7), 40-50.
Saeed, M. M., Gull, A. A., & Rasheed, M. M. (2013). Impact of Capital Structure on Banking Performance (A
Case Study of Pakistan). Interdisciplinary Journal of Contemporary Research in Business, 4(10), 393-403.
Safiullah, Md. (2010). Superiority of Conventional Banks & Islamic Banks of Bangladesh: A Comparative
Study. International Journal of Economics and Finance, 2(3), 199-207.
Samad, A. (2004). Performance of interest-free Islamic banks vis--vis interest-e-based conventional banks
of Bahrain. IIUM Journal of Economics and Management, 12(2), 1-15.
Shahid, H., Rehman, R., Niazi, G. S. H., & Raoof, A. (2010). Efficiencies Comparison of Islamic and
Conventional Banks of Pakistan. International Research Journal of Finance and Economics, (49), 24-42.
Siraj, K. K., & Pillai, P. S. (2012). Comparative Study on Performance of Islamic and Conventional Banks
in GCC region. Journal of Applied Finance and Banking, 2(3), 123-161.
Syafri. (2012). Factors Affecting Bank Profitability in Indonesia, Paper Presented at The 2012 International
Conference on Business and Management, Phuket- Thailand.
Viverita. (2010). Performance Analysis of Indonesian Islamic and Conventional Banks. Electronic copy
available at: http://ssrn.com/abstract=1868938.

World Academic Journal of Business & Applied Sciences-Journal of Economics & Finance-Vol.1 No.2 (2013)

List of Tables
Table- 1
ROE

ROA

NSR

DTAR

CAR

ATR

Mean

2.46

-0.3496

47.7252

72.3556

23.9012

14.2088

Median

0.09

0.02

47.7

78.75

17.65

13.61

Std. Dev.

8.979317

1.446543

10.79265

13.03161

13.73281

6.91089

Observations

25

25

25

25

25

25

Descriptive Statistics (Islamic Banks)

Table- 2
ROE
Mean

NSR

DTAR

CAR

ATR

9.2368

-3.1972

37.5244

76.1204

14.1096

16.4168

11.18

1.21

35.83

76

11.35

16.05

27.46183

21.48512

20.10444

6.946273

7.77835

3.775496

25

25

25

25

25

25

Median
Std. Dev.

ROA

Observations

Descriptive Statistics (Conventional Banks)

Table- 3
ROE
Mean

NSR

DTAR

CAR

ATR

5.8484

-1.7734

42.6248

74.238

19.0054

15.3128

4.865

0.51

43.3

76.89

14.365

14.995

20.50823

15.13897

16.77996

10.50844

12.10218

5.623013

50

50

50

50

50

50

Median
Std. Dev.

ROA

Observations

Descriptive Statistics (All Banks)

Table- 4
ROE

NSR

DTAR

CAR

ROE

NSR

0.165986

DTAR

0.373151

-0.26903

CAR

-0.47588

0.364653

-0.69399

ATR

0.582182

-0.14538

0.262491

0.48572

Correlation Analysis (Islamic Banks)

ATR

World Academic Journal of Business & Applied Sciences-Journal of Economics & Finance-Vol.1 No.2 (2013)

Table- 5
ROE
ROE

NSR

DTAR

CAR

ATR

NSR

0.484697

DTAR

-0.20929

-0.44872

CAR

0.259216

0.569388

-0.77756

ATR

0.121465

0.121902

0.339989

1
1
-0.17463

Correlation Analysis (Non-Islamic Banks)

ROE

NSR

DTAR

CAR

ATR

ROE

NSR

0.352529

DTAR

0.038702

-0.33473

CAR

-0.07474

0.470585

-0.71408

ATR

0.240036

-0.06915

0.305751

0.44975

Table- 6

Correlation Analysis (Combined)

Table 7

Islamic Banks

Non-Islamic Banks

Coefficient

T-Statistics

Coefficient

T-Statistics

0.320884

0.140133

0.175392

0.406762

ROE

0.113751

3.709645*

0.137012

5.950502*

NSR

0.031793

1.495891

-0.104038

-0.699444

DTAR

-0.023588

-1.139603

-0.334668

-0.634217

CAR

-0.028199

-1.238573

0.112088

2.332101*

ATR

-0.006119

-0.167039

-0.739088

-1.114412

Variable

R-Square

0.671548

0.807808

F-Statistics

7.769405

15.97187

World Academic Journal of Business & Applied Sciences-Journal of Economics & Finance-Vol.1 No.2 (2013)

Observations

25

25

*Level of significance of T statistics is 5%

Regression Analysis

Table 8

Coefficient

T-Statistics

1.992997

0.113901

ROE

0.535904

6.999457*

NSR

0.054707

0.523072

DTAR

-0.126228

-0.670461

CAR

0.266552

1.392097

ATR

-0.321787

-1.130771

Variable

R-Square

0.632108

F-Statistics

15.1201

Observations

50

*Level of significance of T statistics is 5%

Regression Analysis (Combined)