Since the global 2007/2008 financial crisis, policymakers have sought to strengthen financial inter mediation that is performed by conventional banks and non-bank financial institutions. The aim has been to address the demerits and fault lines that helped trigger one of the most devastating financial crises in a century, and to enable a more inclusive, stable financial system that promotes stability as well as economic development and growth. Islamic finance offers major features consistent with these objectives. Islamic finance refers to financial services that conform to Islamic jurisprudence, or Shari’ah, which bans interest, speculation, gambling and short-sales; requires fair treatment; and institutes sanctity of contracts. And these principles hold the promise of supporting financial stability, since the key principle of Islamic finance is that financial institutions such as banks and insurance companies should share in both risks and rewards of the projects and loans they finance.This study is investigates the effect of Islamic financial principles on financial performance of banks. The study relied on secondary data to address the research objective.The findings expects to provide recommendation on the possible challenges facing Islamic commercial banks as well as possible policy recommendations. The target population for the study is the fully fledged Islamic bank, Gulf African Bank.A five year secondary data is collected and used for the four Islamic products including Murabahah, Musharakah, Mudarabah and Ijarah, as well as financial performance based on these products. Descriptive statistics generated the amount of various Islamic products and trends in financial performance The study findings indicated a notable offer of Islamic contracts within the periods 2015-2019. The amount of Islamic contracts fluctuated from one year to
another with Murabaha contract being the highest and showing steady levels of uptake among the customers.