COVID-19 and bank performance in dual-banking countries: an empirical analysis

Abstract We explore how banks’ income and stock prices respond to the COVID-19 policy measures in countries with dual-banking system, whether Islamic banks over- or underperform compared conventional banks. Applying two-way fixed-effect regressions, we document that changes finance as well net decline much during pandemic interest of Event-study tests show negatively ones workplace closures. do, however, two types differently support schemes. The change increase significantly more their peers when governments install initiatives. Also, positively programs than Because control for investment banking activities services large clients, our findings on stronger response seem result from focus private customers who are supported pandemic. Overall, conclude Shariah compliance does not limit adverse impact crisis banking, but performance responds initiatives one