In Malaysia, the remarkable performance and stability of Islamic subsidiaries of conventional banks have forefront leading in Islamic banking business. This research attempts evaluating the financial performance and stability elements in two full-fledged and two Islamic subsidiaries of conventional banks for eight years (2010-2017). In this research, the profitability is the return on assets (ROA) and stability measures are z-score. The elements of CAMEL framework is denoted as internal determinants by selecting the appropriate ratios of capital adequacy, asset quality, management competency, earning quality and liquidity through hand-collected information provided by the bank websites. Moreover, correlations and regression tests (FEM and GMM) are used to examine the relationships and significance of CAMEL as independent variables with financial performance and stability of Islamic banking. According to determinants of profitability, the assets quality, management efficiency, earning quality and liquidity of Islamic banks supported the return significantly. Instability, the financial stability indicators found to be powerfully critical to assets quality, management efficiency and liquidity. The findings of this research may have thoughtful practical implications on the financial performance and stability analysis of Islamic banking industry. This research provides the practitioner, regulator and researchers consciousness to expand knowledge on CAMEL framework for standardization on performance and stability comparison of banking industry.