Title: The profitability of Islamic banking in Sudan

Authors: Entissar Mohamed Elgadi; Ellen Pei-yi Yu

Addresses: University of East London, 1 Salway Pl, London E15 1NF, UK ' Department of Management, Birkbeck College, University of London, Malet Street, Bloomsbury, London, WC1E 7HX, UK

Abstract: We investigate the possible profitability determinants by employing the dataset comprised by 27 Sudanese banks from 2005 and 2013. Our contribution to the literature is that we examine the following three models of finance specific to Islamic banking performance: (a) Profit and Loss Sharing, (b) Non-profit and Loss Sharing and (c) Salam mode of finance. We find that ownership, capitalisation and asset utilisation have a positive impact on return on assets (ROA) while operation efficiency, bank age, leverage and specialisation bring an adverse impact. Our empirical evidence also indicates that the Profit and Loss Sharing mode of finance (PLS), one of the financial products provided by Islamic banking only, brings a positive impact on both financial performance indicators: return on assets (ROA) and return on equity (ROE).

Keywords: profitability determinants; banking performance; Sudanese Islamic banks.

DOI: 10.1504/IJMP.2018.092859

International Journal of Management Practice, 2018 Vol.11 No.3, pp.233 - 258

Received: 17 Jun 2016
Accepted: 09 Oct 2017
Published online: 01 Jul 2018 *

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