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Md Nazirul Islam Sarker
Arifin Sultana
AZM Shafiullah Prodhan
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Arifin Sultana
AZM Shafiullah Prodhan
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World Journal of Economics and Finance

Financial Performance Analysis of Islamic Bank in Bangladesh: A Case Study on Al-Arafah Islami Bank Limited

Md. Nazirul Islam Sarker, Arifin Sultana, AZM Shafiullah Prodhan

School of Public Administration, Sichuan University, Chengdu, China

Department of Psychology, National University, Gazipur, Bangladesh

Department of Horticulture, Bangabandhu Sheikh Mujibur Rahman Agricultural University, Gazipur, Bangladesh

Accepted 19 May, 2017

Citation: Sarker MNI, Sultana A, Prodhan AZMS (2017). Financial Performance Analysis of Islamic Bank in Bangladesh: A Case Study on Al-Arafah Islami Bank Limited. World Journal of Economic and Finance. 3(1): 052-060.

Copyright: © 2017. Sarker  et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are cited.


Banking sector is an important sector of an economy of a country, so it is necessary to monitor and evaluate the performance of it. The aim of this paper was to examine the performance of Islamic banking of Bangladesh in particular the experience for Al-Arafah Islamic Bank Limited. The paper goes further to explore some experience on the domestic and global challenges which are facing Islamic banking sector. Performance evaluation methodology used to ascertain the objectives in terms of profit maximization, capital structure and liquidity ratios. We used the financial data of bank from 2010 to 2014 and observed that the trend of all the indicators are positive. The ability, efficiency and number of products of Al-Arafah Islamic Bank Limited are increasing gradually. The investment of Al-Arafah Islamic Bank Limited is mostly on short term basis which is generally similar to other Islamic banks in Bangladesh. Islamic banks are facing some difficulties in their operations especially for non-shariah structure of their stakeholders. This study suggests that Islamic banks of Bangladesh should increase Islamic capital market, Islamic financial instruments, and proper zakat distribution and employment opportunities for the betterment of the society.

Keywords: Islamic banking, interest free banking, financial performance, analysis, Al-Arafah Islamic Bank Limited (AIBL)