Question

1. Select two banks(one conventional bank and one Islamic bank in UAE) and do the following: A: Find out as much as possible from the bank • History of each bank • Types of the accounts opened by the bank • Types of customers of the bank • Analysis of the financial statements of the bank • Performance analysis of the bank(rations and trends) B: Customer survey about the awareness and perception of Islamic banks.

Answer 1

Answer:

Conventional bank - Commercial bank of Dubai

Islamic bank - Abu Dhabi Islamic bank

A. Commercial bank of Dubai: Commercial Bank of Dubai (CBD) is a UAE banking and financial administration partnership headquartered in Deira, Dubai. With more than $23 billion in resources, Gulf Business recorded CBD as the seventh biggest bank in the UAE, in light of absolute resources.

• History: It was established in 1969, by an Amiri Decree given by the late Rashid Bin Saeed Al Maktoum. What began as a joint endeavor of Commerzbank, Chase Manhattan Bank and Commercial Bank of Kuwait, advanced into a National Public shareholding organization by 1982. 80% of its offers are held by UAE nationals, while the other 20% are possessed by Investment Corporation of Dubai (a speculation division of the Dubai Government).
  Throughout the decades, it has changed into a dynamic and present-day banking organization obliging all client sections including Wholesale, Corporate, Retail, Business, SME, Private and Affluent through traditional and Sharia agreeable items and administrations.
• Types of accounts by Commercial bank of Dubai:
  Current Account
  - CBD Gold Currency Account
  - Mastercard Debit Card
  - Expat Account
  - Foreign Currency Account
  Money Transfers
  - Domestic Transfers
  - International Transfers
  Savings
  - Savings Account
  - E-saver
  - Mustaqbali Savings Scheme
  Deposits
  - Step-Up CBD Elite
  - Step-Up Time Deposit
  - Bonus Booster Deposit
  - Premium Saver Deposit
  - Time Deposit
  - Unit Time Deposit
• Analysis of financial statements of Commercial bank of Dubai: Commercial Bank of Dubai detailed a solid arrangement of results for 2019 with a net benefit up by 20.5% to AED 1,400 million and all-out resources of AED 88.1 billion. Working pay for 2019 added up to AED 3,033 million, an expansion of 11.3% owing to a 2.8% expansion in Net Interest Income (NII) and a 31.2% increment in Other Operating Income (OOI). Expenses and commission salary expanded by 21.3%, remote trade pay enrolled a 37.7% expansion, venture pay expanded by 179.4%, and other pay expanded by 53.3% contrasted with 2018. CBD has a FICO score of Baa1 and A-by Moody and Fitch separately.
• Performance analysis of Commercial bank of Dubai:

  Market Value: Analysis shows the advancements in offer costs throughout the years 2005-2009. The mean of the costs is 54 in the national bank of Abu Dhabi which is higher than the mean of the offer costs in the commercial bank of Dubai which is 30.85. This implies the general population were all the more ready to put resources into this bank. Commercial bank of Dubai has less standard deviation and a high coefficient of variety than its rival bank which implies the high insecurity of the offer value developments.

  Price Earnings Ratio: This proportion relates the offer cost to the income per share. This proportion communicates the numerous that the commercial centers on a company's income for each offer. A high P/E difference frequently mirrors the market's view of the association's development possibilities. Along these lines, if financial specialists accept that an association's future income potential is acceptable, they might be happy to play a more significant expense for the stock and in this manner help, it's P/E various. The mean estimation is somewhat diverse between the two banks. Overall, speculators are happy to purchase a portion of the commercial bank of Dubai at the cost of multiple times more than its profit per share, while the instance of the national bank of Abu Dhabi is multiple times. The standard deviation and the coefficient of variety show high scattering and greater precariousness of this proportion in connection to the commercial bank of Dubai contrasting with the national bank of Abu Dhabi. This implies the later bank is less influenced by the financial exchange.

  Market Value to Book Value: This proportion structures the connection of offer cost to book esteem. This proportion is a mix of recorded bookkeeping and advertises pointers. It communicates the differential between the book estimation of the net resources of a firm and the market estimation of it. A high proportion implies an expansion in the stock cost of the book esteem per share, and the organization is progressing nicely since the market is happy to pay more than the value per share express that the mean of this proportion is 3.21 for the national bank of Abu Dhabi while the mean of commercial bank of Dubai is In addition, the vacillation around the mean and the coefficient of variety are likewise high for a similar bank. This proportion is influenced by both inside and outside accounts and monetary elements.

  Earnings per Share: This proportion quantifies the gainfulness of the investor's value. The proportion gives a proportion of generally speaking execution and is a pointer of the conceivable measure of profits that might be normal. The analysis shows that the national bank of Abu Dhabi appreciates high productivity per share with exclusive requirement deviation and low degree of the shakiness of this proportion.

Abu Dhabi Islamic Bank: Abu Dhabi Islamic Bank is an Islamic bank situated in Abu Dhabi city, in the United Arab Emirates.

• History: Abu Dhabi Islamic Bank was built upon 20 May 1997 as a Public Joint Stock Company through the Amiri Decree No. 9 of 1997. The Bank started commercial procedure on 11 November 1998 and was officially initiated by Abdullah Bin Zayed Al Nahyan, UAE Minister of Information and Culture on 18 April 1999. All agreements, activities, and exchanges are completed as per Islamic Shari'a standards.
• Type of accounts in Abu Dhabi Islamic Bank: Current Account, Savings Account, Ghina Savings Account, Ghina Salary Account, Banoon Children's Savings Account, Electron Account, Short Term Investment Account, Investment Deposit Account, ADIB UAE-Egypt Account, ADIB Student Account, ADIB Salary Bonus Programme, smart banking Account.
• Financial analysis of Islamic banks of Abu Dhabi: ADIB initiated its activities with a settled up capital of one billion dirhams isolated into one hundred million offers, the estimation of each offer being ten dirhams. The offers are cited on the Abu Dhabi Securities Market. Gainfulness proportions are resolved so as to assess the benefit of a business concern. Benefit proportions, for the most part, incorporate gross edge, working edge, return on value, return on ventures, return on capital utilized, and so forth.
• Performance analysis of Islamic bank of Abu Dhabi:

  Gainfulness: In the cross-sectional analysis, the arrival on resources for Islamic and regular banks were both affected by the financial emergency. ROA for Islamic and traditional banks was 2.2% and 2.0% in the year 2007 individually. The accompanying year the two banks' ROAs have diminished to 1.4% and 1.9%, Islamic and traditional banks individually. In addition in terms of profit for value, both banking frameworks in the UAE encountered a decline, for Islamic it diminished from 18% to 12.5%. The traditional banks additionally had an abatement consequently on value from 21.7% to 18.2%. This finding isn't in line with the past research venture done by Viverita (2010) which finds that Islamic banks have higher ROA and ROE than customary banks in the year 2007 and 2008.

  Liquidity: Regarding fluid resource/absolute resource proportion, Islamic banks kept up higher proportions than regular banks during the two years. In 2007 Islamic bank's fluid advantage for the absolute store was 22.7% and for regular banks, it was 11.3%. The next year there was an abatement in the two banks' fluid resource/complete resource proportion, which recommends that the financial emergency affected the two segments, yet Islamic banks kept up a higher proportion than customary banks, 17.3% and 4.1% individually. The analysis shows the strong structure of advantages in Islamic banks since it keeps up a higher fluid advantage for complete resource proportion. Keeping up a high fluid advantage for all-out resource proportion infers that Islamic banks are more secure as far as liquidity, which drives the Islamic bank to maintain a strategic distance from the fundamental issues that spread in a financial emergency, which is illiquidity. As far as advance to add up to resources, Islamic banks have a higher proportion in 2007, 62.2 and traditional banks had 56.8. In 2008 Islamic and convectional banks expanded their proportion 66.7 and 68.4 separately. The outcome demonstrates that Islamic banks in 2007 were depending more on advances to create benefit pay (Murabaha and Musharaka) than customary banks. Be that as it may, in 2008, the ordinary banks encountered a more extreme increment in the proportion of advance to complete resource, which demonstrates that ordinary banks were depending more on advances to create salary. As the bank keeps up lower advance to add up to resources, it implies the bank is differentiating its advantage portfolio. The finding isn't in accordance with results achieve by Fayed (2013) who reasoned that ordinary banks beat Islamic banks between the year 2008 to 2010 regarding credit to add up to resources in Egypt.

(B) Survey on awareness and perception of Islamic banks: This examination explored the connection between discernment, mindfulness, and comprehension of Muslim record-holders in traditional banks and their support of Islamic banking items and administrations. Information was gathered utilizing the overview approach including hand conveyance of survey. The straightforward irregular inspecting strategy was utilized to draw an example size of 300 and four (304) Muslim record-holders (both male and female) from the populace. Factor analysis was completed to approve the development and Pearson's connection analysis used to evaluate the connections among the factors. Different relapse analysis was likewise used to distinguish the indicators among the factors. The consequences of the connection uncovered that recognition, mindfulness, and comprehension were decidedly connected with the choice of Muslim record-holders in regular banks to disparage Islamic banking items and administrations. The different relapse results additionally uncovered that understanding and mindfulness factors together clarified 27.1 percent of the change of Muslim record holders in a regular bank disparaging Islamic banking items and administrations. To additionally improve their comprehension and mindfulness, the Islamic banking industry should concentrate on the individuals' comprehension of the situation of Shariah on business exchanges, the idea of benefit and misfortune sharing practice and the advantages of Islamic banking items and administrations that would affect on clients' choice, independent of their religion.

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