Abstract: The paper aims to examine the conflicting relationship between liquidity and profitability and its impact on the ability of banks in Sudan to provide finance to economic activities during the period 2000-2018.Central Bank of Sudan annual reports data were collected and used. The liquid assets to total assets ratio (LA/TA) was used to indicate liquidity position of banks. Total finance to total deposits ratio (TF/TD) was used to indicate the provision of finance. Return on assets (ROA) was used to measure the bank′s profitability as indicator of financial performance. Ordinary least squares method was used to determine the relations between the variables. The main findings revealed that, ratio of liquid assets to total assets positively affect the provision of banking finance, while return on assets negatively related. The study recommends that banks should diversify the sources of profitability and should not totally depend on demand deposits to provision the finance, because customers default might lead to reduce of liquidity causing deterioration of profitability and the financial performance of banks.