In this chapter an attempt is made for the first time to assess the financial performance of Islamic banks and conventional banks by choosing a matched sample of banks to assess their financial performance across the world over a lenghty period. Islamic banking is based on replacing the pre-fixed-interest-based bank deposit-cum-lending activities with risk-sharing and profit-sharing principles advocated by Islam, which in turn appears to be consistent with the social norms of pre-modern societies prior to the rise of interest-based-fractioning banking in the last 200 years, which refers to the fractional-reserve banking from the close of the 18th century.