Islamic vs. conventional banking: what about the efficiency during coronavirus?

Abstract

Purpose The aim of this paper is to investigate and to measure the efficiency of Islamic banks through a comparative study with their conventional counterparts during the coronavirus period for the case of MENA region. Design/methodology/approach Indeed, this study will use the parametric method for a panel of 92 banks, including 27 Islamic banks and 65 conventional banks, over a ten-year period (2012–2021) and from eight MENA countries, namely, Bahrain, Egypt, Jordan, Kuwait, Qatar, UAE, Yemen and Tunisia. Findings The findings show that Islamic banks are more profitable than conventional banks before and during Covid-19, this result can be explained by the effectiveness of Shariah principles, differences in cost control, management and resource allocation. In addition, this study found that conventional banks outperformed Islamic banks after Covid-19. Originality/value This is a recent empirical study that investigates a timely and important topic.