Islamic Banking is one of the rapidly developing areas of finance in Kenya and the world at large. This study aimed to fill the gap in knowledge of the factors that enhance profitability of Islamic banking and especially in Gulf African bank. The objectives of the study were; to examine Shari’ah compliance as a factor influencing the profitability of Islamic banking, to investigate and understand Perception of people towards Islamic banking Products, and to establish the relationship between customer satisfaction and Profitability of Gulf African bank. To achieve the above, the researcher adopted a survey research design. The target population was 4,300 headquarter customers and 27 Managers in Head quarter. Stratified and simple random sampling methods were used to identify the sample. Both primary and secondary data have been used for the study. The secondary data was obtained from Central Bank of Kenya (CBK) and Kenya Bankers Association. Questionnaires were used to collect primary data from the respondents. The data that was collected was first coded statistically and then analysed using the Statistical Package for Social Scientists (SPSS). Chi-square was conducted to test hypothesis of agreement among respondents. These research findings indicate positive relationship between Shari’ah Compliance, Islamic banking products and customer satisfaction to profitability of Islamic banks. The results from the inferential statistics showed value of R2 is 0.54 which means that 54.1% of dependent variable profitability of Islamic Banking of Gulf African Bank was explained/ contributed by independent variables (Shari’ah compliance, Customer’s Perception and customer satisfaction) analysed. The study concludes that Shari’ah compliance, Customer perception and customer satisfaction were very important towards the profitability of Islamic banking at Gulf African Bank.
