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Performance of Islamic Banks During the COVID-19 Pandemic: An Empirical Analysis and Comparison with Conventional Banking

Author

Listed:
  • Umar Butt

    (College of Business, Zayed University, Dubai P.O. Box 19282, United Arab Emirates)

  • Trevor Chamberlain

    (DeGroote School of Business, McMaster University, Hamilton, ON N0B 2K0, Canada)

Abstract

This study examines the performance and resilience of Islamic banks during the COVID-19 pandemic, a period marked by unprecedented global economic disruption. Drawing on empirical data and a comparative analysis with conventional banking institutions, the research evaluates key financial indicators—liquidity, profitability, asset quality, and capital adequacy—to assess how Islamic banks responded to the crisis. The unique principles of Islamic finance, including risk-sharing, asset-backed financing, and the prohibition of interest and speculative activities, provide a distinct framework for crisis response. By analyzing how these features influenced bank performance during the pandemic, the study offers valuable insights into the relative robustness of Islamic versus conventional banking models. The findings contribute to the academic discourse on financial stability and risk management, offering practical implications for policymakers, regulators, and stakeholders to strengthen financial systems against future global shocks.

Suggested Citation

  • Umar Butt & Trevor Chamberlain, 2025. "Performance of Islamic Banks During the COVID-19 Pandemic: An Empirical Analysis and Comparison with Conventional Banking," JRFM, MDPI, vol. 18(6), pages 1-25, June.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:6:p:308-:d:1672690
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    References listed on IDEAS

    as
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