Risk, Profitability and Market Value Ratios of Islamic Banks in Egypt: A Comparative Study with Conventional Banks

The present study aims to assess the risk, profitability and market values of Islamic banks compared to conventional banks during the period of volatility and crises experienced by Egypt from 2011 to 2017 using financial ratios. The study found that Islamic banks did not expos to higher liquidity risks than conventional banks, where Islamic banks tended to invest in government and debt securities. Credit risk in Islamic banks has also fallen significantly compared with conventional banks, because Islamic banks have tended to reduce credit rates in Murabaha, Mudaraba and Musharaka. The operation risk was not marked by significant differences between Islamic and conventional banks, where the study found that the bulk of the operating income of Islamic banks was the return of government securities and debt, which is not included operational risks. As for market risk and financial risk, Islamic banks have been exposed to higher risks than conventional banks with significant differences. Return on assets (ROA) and price to earnings (P/E) ratios have also declined in Islamic banks, with significant differences from conventional banks. In general, the results of this study show that the obligation of Islamic banks to traditional rules that do not comply with Shari''a standards and objectives leads to the simulation of conventional banks in terms of objectives and practicalities, with the continued weakness of the ability of Islamic banks to achieve profitability and market valueratios like conventional banks.