In the last two decades, financial integration and financial liberalization has resulted into proliferation of multinational banks across the globe. This augmenting growth in multinational banking is proclaimed to enhance financial stability in host countries as they bring about competitiveness and efficiency, introduce best governance practices, superior risk management techniques, product innovation,and above all have parental support at their disposal in times of financial distress. However, at the same time these multinational banks with significant market share can destabilize host economies as they may not only intensify their domestic crises but may also become a source of transmitting financial shocks from home countries to their host economies. Rapid liberalization and facilitative business environment in many Islamic countries has also encouraged large multinational banks to make these countries their destination of choice. However, despite their mushrooming growth, less attention is being devoted to study the impact of these foreign-owned subsidiaries in dual-banking economies where conventional and Islamic banks operate in parallel. Taking a sample of 245 banks and unique matched dataset of 85 foreign-owned subsidiaries operating in dual-banking systems for a period from 2001-2016, our study investigates if Islamic foreign-owned banks behave differently than their conventional counterparts over different facets of financial crisis in both the short-and as well as in the long-run.