Islamic banks in Pakistan less risky but less profitable than conventional banks.
The study compared the financial performance of Islamic and Conventional banks in Pakistan from 2008 to 2012. Conventional banks were found to be more profitable, operationally efficient, but less liquid and riskier compared to Islamic banks. There were significant differences in profitability, capital adequacy, and cash flow between the two types of banks. To improve performance, banks should evaluate and enhance their activities.