Abstract

The aim of this study is to investigate the effect of leverage on financial performance of Islamic Banking in Nigeria. The population of the study was Jaiz Bank because it is the only listed Islamic Banking in Nigeria. The study uses secondary data from annual reports of Jaiz Bank Nigeria Plc quoted on the floor of the Nigerian Stock Exchange for the period of 2012 to 2017. Ex post research design was adopted. This study concludes that there is a positive and significant effect between DEBTCAP and ROA. In addition, positive and insignificant effect exists between DEBTCAP and ROE. Based on the findings, it’s necessary to recommend that Jaiz Bank in Nigeria should not refrain from including loan/debt in their capital mix, or they should have more of debt capital for financing their investments as this will lead to an increase in the return of their assets.

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