Theses and Dissertations
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Item Strategies Adopted by Commercial Banks in Kenya to Enhance Financial Performance(KCA University, 2018) Karuku, Elias K.The purpose of the study was to examine the strategies applied by commercial banks in Kenya to improve financial performance. This study was informed by interest rate capping which necessitates commercial banks to seek other revenue sources and engage in lean and efficient credit risk management. Specific objectives of the research study were to investigate the influence of administration cost-concentration, credit policies, non-interest income and asset quality on financial performance of commercial banks in Kenya. This research study was based on the effectiveness hypothesis, arbitrage pricing theory, financial leverage model and the symmetric information theory. The researcher used descriptive research methodology. The 42 operational commercial banks in Kenya formed the population of interest in this research study. Data for five years (2013 – 2017) was collected from the audited financial reports of these commercial banks. Secondary data that was utilized to achieve the study objectives was sourced from the Central Bank of Kenya bank supervision reports, the audited financial statements of the commercial banks and the websites of the commercial banks. This research study utilized panel data analysis where information for each of the 42 commercial banks on ROA, administration costs concentration, credit policies, non-interest income, asset quality and bank size was gathered for five years. Stata statistical software was utilized for analysis. Presentation of data from the panel regression analysis was through tables and figures. Study findings show that administration cost-concentration had a significant positive effect on financial performance of commercial banks in Kenya (β= 0.4153; p < 0.05). Credit policies had a negative but insignificant effect on financial performance of commercial banks in Kenya (β= -0.1872; p > 0.05). Non-interest income had a significant positive effect on financial performance of commercial banks in Kenya (β= 0.1292; p < 0.05). Asset quality had a significant negative effect on financial performance of commercial banks in Kenya (β= -0.9979; p < 0.05). From the study results, the study recommends the following. On administration costs concentration, commercial banks should seek to enhance their efficiency by leveraging on technology and reducing their operations costs. Commercial banks should tighten their credit policies to ensure that only clients with riskiness that is covered by the capped interest rates access loan products from the commercial banks. Commercial banks should seek to perform other intermediation roles to diversify their revenue sources so that they do not rely heavily on the ever-reducing interest income. Lastly, management in commercial banks should be effective in controlling and monitoring credit risk to achieve a higher credit rating.Item Effect Of Transformational Leadership And Human Resource Management Practices On Financial Performance Of Deposit-taking Saccos In Kenya(Kca University, 2017) Muriithi, Esther W.The Sacco Societies Regulatory Authority (SASRA) is a statutory state corporation established under the Sacco Societies Act (Cap 490) of the Kenyan law. The regulatory body from then standardized the operations by setting guidelines for operations and regulatory requirement that the Deposit Taking SACCOS must adhere for their operating licenses to be granted. The objective of this study was to establish the effect of transformational leadership and human resource practices on financial performance of Deposit Taking SACCOS in Kenya. Few or no studies have been done on areas around transformational leadership and human resource practices and financial performance of SACCOS in Kenya and therefore this study sought to link that knowledge gap. The study type conducted was a census focusing on SACCOS licensed to provide deposit taking services in Kenya in 2017. Both primary and secondary data was used for this study and data was analysed using Statistical packages for social sciences software (SPSS). Descriptive data analysis was conducted using linear regression model to analyse data. The study focused on four independent variables (transformational leadership practices, training and development practices, recruitment practices and compensation) whose effect on the dependent variable (return on assets) was predicted. The results of the data analysis indicates that transformational leadership, recruitment and training and development practices have significant positive effect on the return on assets for SACCOS. While compensation had a negative effect on the return on assets for SACCOS. The study indicated that the variables under study are correlated to one another. The expectation is that the findings of this research will assist in filling that knowledge gap and contribute to further research by considering the inclusion of SACCO characteristics such as common bond and duration of licensing by SASRA. The study also recommends that future research may focus on financial performance over different time periods for the same deposit taking SACCOS.Item Effect Of Selected Firm Characteristics On Financial Performance Of Commercial Banks In Kenya(KCA University, 2021) Juma, EvansCommercial banks operate in a turbulent business environment and this calls for an understanding of their internal and external factors to enable them to increase their financial performance. This study’s objective was to examine the influence of selected firm characteristics on financial performance of commercial banks in Kenya. Precisely, the study sought to establish the influence of capital adequacy, board composition, management efficiency and working capital on financial performance of commercial banks in Kenya. The study was anchored on the buffer theory of capital adequacy, agency theory, performance theory and the liquidity-profitability trade-off theory. The study was carried out using a longitudinal design. The 42 commercial banks operating in Kenya by December 2019 were the study population. Secondary data from 2015-2019 was collected from Central Bank of Kenya’s yearly banking surveys, and the commercial banks’ financial statements. To analyse the collected data, the study applied the panel data regression model. The appropriate diagnostic tests were conducted before and after fitting of the model. The study findings established that capital adequacy had a significant and negative influence on financial performance measured through ROA (β = -0.3186, t = -5.43, p < 0.05), but had no significant influence on financial performance measured through ROE (β = 0.4091, t = 1.29, p = 0.200). The study also determined that board composition had no significant effect on the financial performance of the commercial banks as indicated by ROA (β = -0.2555, t = -0.11, p = 0.91) and ROE (β = -1.64, t = -0.13, p = 0.893). Moreover, the study findings determined that management efficiency had a significant and negative influence on financial performance measured through ROA (β = -0.2105, t = -11.43, p < 0.05) and ROE (β = -0.9342, t = -9.37, p < 0.05). The findings also established that working capital had no significant effect on the financial performance of the commercial banks as indicated by ROA (β = -0.7792, t = -1.01, p = 0.312) but had a significant and negative influence on the financial performance of the commercial banks as indicated by ROE (β = -8.3384, t = -2.00, p =0.047). The research offers the following recommendations based on its findings. First, the study recommends to Central bank of Kenya to be vigilant to ensure that the minimum CAR for commercial banks in Kenya is met by all banks. Regarding management efficiency, the study recommends to commercial banks in Kenya to have a suitable and organized policy framework to guarantee financial management efficiency. Lastly, the study recommends to commercial banks to carefully balance their working capital to balance the risk and returns that come from holding liquid assets and current liabilities.