The recent financial meltdown has made manifest the need to search for an alternative financial system that is more resilient. Theoretically, the principles underlying Islamic banking and finance promise a more stable system. According to these principles—which originate in the Sharīʻah—Islamic banks should focus on feasible economic investments, undertake transactions backed by real assets and finance potentially productive activities. Hence, in principle, they are insulated from speculative and unproductive activities, and their performance is not subject to the same macroeconomic forces as that of their conventional counterparts. However, empirical evidence that supports the claim that the performance of Islamic banks is not related to the external economic environment is very limited. Accordingly, the motivation of this study is to fill in the gap by providing empirical evidence as to whether the performance of Islamic banks depends more on their internal conditions rather than external factors. Using global Islamic banks’ data and applying the standard panel data approach, our findings point that the performance of Islamic banks depends more on bank specific characteristics such as capital, asset quality and liquidity while macroeconomic factors do not significantly influence Islamic banks’ profits. This lends support to the theoretical assertion that Islamic bank performance does not rely heavily on the macroeconomic environment.