The banking sector primarily differing from the other section of the market vast quandary for administration and financiers comparable is whether or not a most favorable capital structure exists and the way numerous capital structure choices each immediate and lasting persuade business level of performance. The choice on which capital structure to select is among the foremost important and decisive choices within the banks as a result they have an influence on the financial performance of the banks. Totally different writers have different view over the weight of capital structure on the financial performance of commercial banks. The meager studies during this field, on effects of capital structure generated a data gap that galvanized this study. This project aspired to review effect of capital structure on Islamic banks‟ (IBs) financial performance as from 2011-2015 because during this era of study, Kenya encountered political anxiety, resulting in insecurity within the stock exchange and the general elections held in 2013 were the first under the Constitution of Kenya 2010 and ushered in a major transformative devolved governance system of 47 county governments. Since then, the government has been putting in place various legal, regulatory frameworks and the relevant supporting institutions aimed at implementing the constitutional provisions for successful implementation of devolution. As tenderfeet to the souks, IBs face a trade-off. They will either create use of high capital proportions that amplify the reliableness and security of the bank and worsen the specified take by investors or depend upon deposits and Islamic bonds that are deemed as economical sources of funds because of their tax recompense. In recent times in Kenya, there has been a big swell within the variety of recent creativity to expand and progress the concept of Islamic financing. Commercial banks are reformatting their growth strategies to focus more on the speedy growing Islamic banking business as they aim bigger client numbers and more revenues.
