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Analysis of Bank’s Financial Performance Pre-, During-, and Post-Covid-19: A study of Islamic and Conventional Banks

Sadique, Shehzi LU and Asih, Sholeha Tri LU (2025) NEKN01 20251
Department of Economics
Abstract
This study compares the financial performance of Islamic and conventional banks across the pre-, during-, and post-Covid-19 period from 2018 to 2024. Using the CAMEL framework, a Financial Performance Index (FPI) was developed to evaluate stability and resilience. The results show that Islamic banks consistently achieved higher FPI particularly during and post pandemic, indicating greater overall stability. However, the component-level analysis reveals that Islamic banks outperformed in capital adequacy, management quality and liquidity, while conventional banks showed strength in asset quality and earnings. Capital Adequacy was more resilient for Islamic banks, whereas conventional banks experienced a sharp decline during the pandemic and... (More)
This study compares the financial performance of Islamic and conventional banks across the pre-, during-, and post-Covid-19 period from 2018 to 2024. Using the CAMEL framework, a Financial Performance Index (FPI) was developed to evaluate stability and resilience. The results show that Islamic banks consistently achieved higher FPI particularly during and post pandemic, indicating greater overall stability. However, the component-level analysis reveals that Islamic banks outperformed in capital adequacy, management quality and liquidity, while conventional banks showed strength in asset quality and earnings. Capital Adequacy was more resilient for Islamic banks, whereas conventional banks experienced a sharp decline during the pandemic and were able to partially recover in the coming years. The regression analysis incorporating bank-level (asset growth and bank size) and macroeconomic variables (GDP, inflation) indicates that asset growth has negatively impacted conventional banks, while bank size had a positive effect on Islamic banks. Macroeconomic factors were statistically significant for either group in several countries. These findings highlight differences in resilience patterns between the two banking models and suggest that bank-specific characteristics play a more key role than macroeconomic conditions in shaping financial performance. (Less)
Please use this url to cite or link to this publication:
author
Sadique, Shehzi LU and Asih, Sholeha Tri LU
supervisor
organization
course
NEKN01 20251
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Islamic, Banking, Covid-19, CAMEL
language
English
id
9210955
date added to LUP
2025-09-12 10:00:43
date last changed
2025-09-12 10:00:43
@misc{9210955,
  abstract     = {{This study compares the financial performance of Islamic and conventional banks across the pre-, during-, and post-Covid-19 period from 2018 to 2024. Using the CAMEL framework, a Financial Performance Index (FPI) was developed to evaluate stability and resilience. The results show that Islamic banks consistently achieved higher FPI particularly during and post pandemic, indicating greater overall stability. However, the component-level analysis reveals that Islamic banks outperformed in capital adequacy, management quality and liquidity, while conventional banks showed strength in asset quality and earnings. Capital Adequacy was more resilient for Islamic banks, whereas conventional banks experienced a sharp decline during the pandemic and were able to partially recover in the coming years. The regression analysis incorporating bank-level (asset growth and bank size) and macroeconomic variables (GDP, inflation) indicates that asset growth has negatively impacted conventional banks, while bank size had a positive effect on Islamic banks. Macroeconomic factors were statistically significant for either group in several countries. These findings highlight differences in resilience patterns between the two banking models and suggest that bank-specific characteristics play a more key role than macroeconomic conditions in shaping financial performance.}},
  author       = {{Sadique, Shehzi and Asih, Sholeha Tri}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Analysis of Bank’s Financial Performance Pre-, During-, and Post-Covid-19: A study of Islamic and Conventional Banks}},
  year         = {{2025}},
}