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marginally lower than 100, which indicate that Islamic banks are generally borrowers in the
interbank market, whereas their conventional counterparts are lenders.
Among the Sub-Sahara African countries, only the Islamic banks from Sudan and Gambia are
listed in the BankScope database. Sudan represents a unique financial system, where only
Shariah compliant financial services are provided. Due to a lack of sufficient data, Islamic
banks from Gambia are not included in the analysis. The sample includes 8 Islamic banks from
Sudan, with an average asset size of 469.082 million USD and average Total Deposit volume of
224.137 million USD. Islamic banks in the region have on an average of 6.38 branches and 103
employees. Islamic banks in Sudan exhibit an average Loan Loss Res/Gross Loans ratio of
3.02% and a Loan Loss Res / Impaired Loans ratio of 4.91%, which is generally lower than
many other peer Islamic banks in other geographic areas. In general, the Islamic banks in
Sudan maintain a significant cushion to cover the risk exposure and potential capital adequacy
problems. Most of the capital ratios are higher than other peer Islamic banks. Higher Equity /
Net Loans reflects a better cushion to absorb losses on the loan book. In general, higher
operating ratios represent a lower cost of funds, higher efficiency, and higher yields on equity
and assets. Islamic banks in Sudan keep a significant portion of their portfolio invested in
liquid assets; the high ratio of Liquid Assets / Tot Dep & Bor reflect better liquidity.
The latter segments of the chapter present a comparative analysis of the risk matrices for the
Islamic bank and conventional banks for the five major Islamic financial markets: a) Malaysia,
2) Turkey, 3) Kingdom of Saudi Arabia, 4) United Arab Emirates, and 5) Bangladesh.
15 Malaysian Islamic banks listed in the BankScope database are considered. The average total
asset of the Malaysian Islamic bank sample is 5,727 million USD, with average deposits of
5,085 million USD. Asset Quality for the Islamic banks’ loan portfolio is rather poor, compared
to that of their conventional counterparts. The Malaysian Islamic banks, on average, have
higher net interest margins and net interest revenue to average assets, compared to
conventional banks ratios, which reflects cheaper sources of funding. However, conventional
banks have higher dividend pay-out ratios, ROE, and ROA. In Malaysia, both Islamic and
conventional banks are, in general, borrowers in the interbank market. Islamic banks also
exhibit higher liquidity.
4 Turkish Islamic banks listed in the BankScope database are included in the analysis. An
average total asset of the Turkish Islamic bank is 5,540 million USD with average deposits of
4,470 million USD. Islamic banks have on average 1,786 employees and average 80.5 branches.
Asset quality for the Turkish Islamic banks is mixed, when compared to their conventional
banking competitors. In general, conventional banks in Turkey keep a higher capital cushion,
compared to their Islamic banking counterparts. On the average, Islamic banks in Turkey
maintain a better liquidity position, compared to the conventional banks.
4 Islamic banks from K.S.A. listed in the BankScope database are considered in the analysis.
Asset Quality of the K.S.A. Islamic banks’ loan portfolios is relatively better, compared to that of
their conventional counterparts. In general, Islamic banks in KSA maintain better capital
adequacy, as evident by capital adequacy ratios. Higher Equity/Net Loans ratios for the Islamic
banks reflect the fact that Islamic banks have a better ability to absorb losses on the loan book.