Islamic banking is considered as alternative to conventional banking. It focuses on profit/loss and risk sharing, than interest based deposit/lending followed in conventional banking. Conventional Banking cherishes a long history while Islamic banking gained importance in last few decades. The study review and compare performance of conventional banks and Islamic banks operating in GCC region during 2005-10. The study investigates the presence, if any, of similarity in growth of chosen performance indicators of Conventional Banks and Islamic Banks in GCC region. The study selected six Islamic banks and six conventional banks. A comparative study is undertaken based performance indicators such as OER, NPR, ROA, ROE, EOA, operating expense, profit, assets, operating income, deposits and total equity. Inferences based on analysis revealed better performance of Islamic banking during the study period. Our analysis revealed that Islamic banks are more equity financed than conventional banks. ANOVA showed the presence of significant relationship in movement of selected financial indicators. Conventional banks registered growth in revenue during the period, but could not achieve improved profitability on account of higher provisions towards credit losses and impairment losses. The performance indicators were affected by financial crises as may be noted from the recessionary trends since 2007.