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The profitability of Islamic banking in Sudan

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  • Entissar Mohamed Elgadi
  • Ellen Pei-yi Yu

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).

Suggested Citation

  • Entissar Mohamed Elgadi & Ellen Pei-yi Yu, 2018. "The profitability of Islamic banking in Sudan," International Journal of Management Practice, Inderscience Enterprises Ltd, vol. 11(3), pages 233-258.
    • Handle: RePEc:ids:ijmpra:v:11:y:2018:i:3:p:233-258
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    Cited by:

    1. Ahmed Nourrein Ahmed Mennawi & Ahmed Ali Ahmed, 2020. "Influential Factors on Profitability of Islamic Banks: Evidence from Sudan," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(6), pages 1-1, June.

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