Islamic banking, conventional banking, banks financial performance measures, profitability, Egypt.

There is no doubt that banks have significant position in the welfare of any economy. In the last few decades, Islamic banking sector was introduced. This new banking type has demonstrated a competitive position with the traditional conventional banks. It has acquired the interest in many countries and regions. Islamic banking system has accelerated its growth globally in terms of total assets and market share. Egypt is the birthplace for this new system, although, it is not taking a leading role in the implementation as well as the academic research. A summary of Islamic banking principles and instruments are introduced before going through the details of the empirical study to compare the financial performance of both types of banks. The focus of this research is to investigate the effect of the inter-bank factors along with the size of banks on the financial performance of these banks working in the Egyptian market. The research main aim is to perform a comparative analysis on the financial performance of both Islamic and conventional banks. Research analyses adopted in this study are descriptive, correlation and regression analyses to test the research hypotheses. Findings of this research provide evidence that some of the inter-bank factors found to have significant effect on the financial performance of these banks; however, no considerable differences between the two groups were found which suggests that bank type is not a significant variable and that conventional an