This study aims to conduct a comparative analysis on the impact of the 2007/2008globalfinancial crisis on the Islamic and conventional banks in Malaysia. Three performanceindicators, namely profitability, liquidity and credit risk of the banking institutions are beingconsidered. The study covers a five-year period from 2006 to 2010, and divides the sampleperiod into before, during, and after the financial crisis. In methodology, the study adopts theratio analysis on a sample of six Islamic banks and nine conventional banks. The studydocuments two main findings: (i) there was no major difference in profitability and credit riskamong the two types of the banking institutions due to the financial crisis; and (ii) the Islamicbanks were holding more of the liquid assets than their conventional counterparts, thus areless exposed to the liquidity risks due to the financial crisis. The study provides a number ofpractical implications to the banking sector, particularly on the issue of balancing theprofitability-liquidity conflict in the banking institutions.