School of Business
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Item Chief executive officer characteristics and financial performance of commercial banks in Kenya(KCA University, 2025) Nyantika, Bevaline N.The performance of commercial banks is critical to the stability and growth of Kenya’s financial sector and the broader economy. This study investigates the influence of Chief Executive Officer (CEO) characteristics on the financial performance of commercial banks in Kenya. Specifically, it examines the effects of demographic attributes age, gender, education, and tenure on key financial indicators, including profitability, return on assets (ROA), and net interest margins. Anchored in the Upper Echelons Theory, the study adopts a quantitative research design and utilizes secondary data sourced from the annual reports and regulatory filings of 39 licensed commercial banks over the period 2003 to 2023. Regression analysis was employed to determine the relationship between CEO attributes and bank performance. The results indicate that certain CEO characteristics significantly influence financial outcomes. CEO tenure and gender diversity were positively associated with improved performance, suggesting that longer-serving CEOs and greater female representation at the executive level enhance strategic outcomes. CEO age also demonstrated a positive relationship with performance, reflecting the value of experience and maturity in executive decision-making. In contrast, the impact of educational background was inconclusive, showing no consistent effect across all performance metrics. These findings highlight the strategic role of executive leadership in shaping financial performance in the banking sector. The study offers key insights for policymakers, bank boards, and stakeholders, emphasizing the importance of integrating CEO demographic considerations into leadership selection processes. Recommendations include the adoption of performance-based remuneration systems, fostering leadership continuity, and promoting gender diversity in top executive roles. Overall, the study enhances understanding of leadership dynamics in corporate governance and lays the groundwork for future research on executive influence in financial institutions.Item The Effect Of Financial Innovations On Financial Performance Of Commercial Banks In Kenya(KCA University, 2017) Muia, SarahThe financial institutions have embraced changes by exploiting the capabilities presented by the Information and Technology. Financial innovations adopted by commercial banks refer to the development of new products and new ways of delivering products to customers. The specific objectives of the study were; to determine the effect of electronic fund transfers, mobile banking and internet banking on financial performance of commercial banks in Kenya. This study had a target population of an aggregate of all the commercial banks that are licensed and regulated by the Central Bank of Kenya with a sample of twelve commercial banks. This study used secondary data from Central Bank of KenyaNational payments Statistics supervisory reports and bank annual reports. This study collected data for a period of seven years.Data was analysed using STATA. A multiple regression model was used to establish the relationship between the electronic banking, mobile banking and internet banking on the Return on Assets of the commercial banks. The study has found that financial innovations have an influence on the performance of commercial banks in Kenya. The study found out that variations in Return on Assets could be explained by electronic funds transfers, mobile banking and internet banking. The study further established that all variables, that is, electronic funds transfers, mobile banking and internet banking affect Return on Assets positively. The study thus recommends that it is important for commercial banks to prudently adopt financial innovations as it has both positive effects on performance of commercial banks in Kenya.Item Effect Of Investment In Financial Innovations On Financial Performance Of Commercial Banks In Kenya(KCA University, 2016) Kiptum, Abraham K.The use of financial innovation in commercial banking in Kenya is on the rise in as a policy of mitigating the challenges posed by the dynamic banking environment. This study aims at establishing the contribution of this use of financial innovation on the financial performance of the commercial banks in Kenya. The dependent variable are institutional innovation, product innovation and marketing innovation. The dependent variable is financial performance (Return on Asset). The previous research work did not use all the independent variable but most on specific individual innovations. The study adopts a descriptive study where use of panel data was used in the data analysis of the secondary data collected from published financial records or from the finance departments of commercial banks in Kenya. The target population included the 41 commercial banks in Kenya. It adopted a census survey where 41 banks were used in the study and there was no sampling since the population size was small. Regression and correlation analysis was used to study the relationship between the dependent and the independent variables of the study. These were employed to analyze the data and find out whether there was any effect of financial innovations on financial performance of commercial banks. The study used descriptive statistics such as mean and standard deviation to describe the data with regard to the variables. The effect of each type of innovation on financial performance will be assessed using regression analysis. The findings would be used to make recommendations regarding the use of financial innovation as policies of ensuring competitiveness in the commercial banking sector in Kenya.Item Effect Of The Value Network On The Performance Of Commercial Banks In Kenya(KCA University, 2016) Njogu, Kawira P.Globalisation and advances in information technology have created a complex, dynamic economic landscape with a shift from a focus on tangibles to intangibles thus creating the intangible - service and information - economy: A networked economy characterized by partnerships amongst firms. As a result, the Commercial Banking sector in Kenya has progressed from a regulatory and strategic perspective as banks have built Value Networks in order to counter increasing competition thus constantly innovating products and services; and increasing market segments towards growth. The main purpose of this study was to investigate the effect of the Value Network on the performance of Commercial Banks in Kenya. Independent variables examined included scale, growth in alliances, R&D expenditure and training. A sample of 15 Commercial Banks was drawn from the target population of 43 Commercial Bank headquarters located in Nairobi and studied over five years from 2010 to 2014. Data was collected from audited financial statements. Data analysis included descriptive and inferential statistics. The former employed frequency distributions, measures of central tendency and exploratory data analysis using growth pattern graphs and overlain growth plots. The results indicated an upward trend in all variables across the period and the presence of random effects. Panel descriptive analysis was also conducted which revealed the between and within differences. The Jarque Bera test for Normality indicated that data was not normal. Consequently Logarithm transformation of all variables, excluding R&D intensity, was employed to achieve Normality. R&D intensity was not transformed because it is a ratio. Inferential statistics entailed the use of correlation and panel regression analysis. No multicollinearity was present because all independent variables registered a correlation coefficient of less than 0.8. Prior to regression panel data diagnostic tests were run. They confirmed: The appropriateness of random effects regression for analysis (Breusch-Pagan LM test), absence of heteroskedasticity (modified Wald test), presence of time effects (time fixed effects test) and serial correlation (Wooldridge-Drukker test). Therefore, the FGLS two way random effects regression model was employed in the study (random effects model was also clarified by the Hausman test). The findings indicated that scale, growth in alliances and training had a positive significant relationship whilst R&D expenditure had a negative significant relationship with Commercial Bank performance. The study suggested various recommendations: On scale: Bank managers are advised to increase adoption of NPS and TCF metrics. Secondly, on growth in strategic alliances: As banks establish more strategic alliances management should apply Epstein’s five measures of success to ensure well structured management. Thirdly, on R&D expenditure: Policy makers should shift the approach to R&D financial reporting: Capitalize R&D’s Development component and seek sectoral reforms on this through regulators such as the Central Bank of Kenya and Kenya Banker’s Association. Finally, on training: Managers are encouraged to incorporate more of the Value Network’s systems thinking as they invest further in training. Suggested areas for further study include comparative analysis amongst different industry sectors and countries, investigation on other firm level factors such as customer loyalty and macroeconomic factors as the determinants of Commercial Banks’ performance in Kenya, study on the effect of R&D on firm performance in the longer term and the threshold effect of R&D investment on optimal performance.