MENA in Focus

In Focus 1: Conventional Banks versus Islamic Banks: Weathering the Crisis

In this section, we focus on the performance of a sample of conventional banks in the Gulf Cooperation Council (GCC) countries during the crisis period and compare them to a sample of Islamic banks in the region. In a previous issue of the Mena in Focus publication, dated August 5, 2008, we discussed the performance of Islamic banks versus conventional banks up to 2007, concluding that Islamic banks were more profitable than conventional banks, despite generally being less cost efficient. We now take a look at how these banks have fared since the global financial crisis reached the Middle East in the latter part of 2008. Our focus will be on balance sheet growth and, more importantly, asset quality, in addition to profitability and efficiency.


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