Gauging the impact of Covid 19 on the Islamic banking System: A comparison of the financial performance of Islamic Banks in Bahrain during pre and post-Covid-19 Era

The Covid-19 pandemic served as a wake-up call to both individuals and institutions alike. This global outbreak served as an important reminder that no matter the advancement in science, technology, businesses and all other significant fields, one such contingency could cause disruptions on a mega-scale. The Islamic banking system, that enjoys widespread success across not just the Muslim world, was no exception to the implications of the pandemic. This paper is an attempt at comparing the financial performance analysis of Islamic banks in terms of their profitability, liquidity, solvency and efficiency in the pre and post-Covid times. Using purposive sampling, six retail Islamic banks operative in Bahrain and their performance for 6 years covering before and after Covid-19 were used for analysing their financial performance. Ratio analysis, statistical mean, standard deviation, variance, and t-test have been employed to analyse the data. As such, the findings are indicative of the impact of Covid 19 on the financial performance of Islamic banks as significant in the short-term. This impact, though significant, was not as extensive as it has been on other fields such as the tourism, airline and hospitality industries. This stands evidence of the robustness of Islamic banking institutions.