Cooper and schindler 2003 describe longitudinal study as a study that is carried out repeatedly over an extended period. The objective of the study was to determine the effectiveness of digital marketing strategies on the performance of commercial banks in kenya. This research strived to give an understanding into the determinants of financial performance in kenya. The specific objectives were to establish the relationship betweenboard size, nonexecutive directors, and board diversityand performance of commercial banks in kenya and the extent to which strategic leadership moderates such relationships. Again, all banks in kenya are regulated by the kenya bankers association in collaboration with the central bank of kenya.
Savings bank accountholder is required to maintain a minimum balance in his account to avail of cheque facilities. A comprehensive list of the top biggest banks in kenya will always include kenya commercial bank, national bank of kenya, commercial bank of africa, barclays, just to name a few. The targeted population of the study was the 11 listed commercial banks in kenya. This study concluded that for internal factors of the commercial banks which include operating. In this study, longitudinal research design was used. Pdf factors affecting financial performance of commercial. Role of commercial banks in economic development of country. The banking sector in kenya comprises 43 registered commercial banks that are licensed by the. The study will be guided by the following objectives.
Credit risk mitigation strategies adopted by commercial. Effect of internet banking on financial performance of. Certainly, the number of commercial banks in kenya comprises of commercial banks, mortgage finance institutions, and nonoperating holding companies. The holding company oversees kcb kenya incorporated with effect from january 1, 2016 and all kcbs regional units in uganda, tanzania, rwanda, burundi, ethiopia and south sudan. Understanding the factors that influence the performance of commercial banks is critical not only to the management of these commercial banks but also to other stakeholders and interest groups such as the countrys central bank, the government as a. In kenya, there is also the hello money offered by barclays bank of kenya among other forms of electronic banking offered by commercial banks in kenya cbk annual report, 2012. The primary classification of banks in kenya is by ownership. It uses panel data due to the advantage that it has. Market share index is the composite of net assets, deposits, capital, number of loan accounts and number of deposit accounts. Pdf credit risk management practices of commercial banks. Pdf determinants of financial performance of commercial banks. Effects of microfinance lending on business performance.
The target population was the listed commercial banks in kenya as licensed by the central bank of kenya as. Financial inclusion in kenya continues to rise, mainly driven by proliferation of mobile and digital channels in kenya there are a total of 40 commercial banks, with charterhouse bank under statutory management and imperial bank under receivership, 1 mortgage finance company, microfinance banks, 9 representative offices of foreign banks. The effect of mergers and acquisitions on financial performance of banks a survey of commercial banks in kenya 1. The banking industry in kenya has also involved itself in automation, moving from the traditional banking to better meet the growing complex needs of their customer and globalization challenges. Another general classification of banks is by nature, that is, microfinance banks and commercial banks. Kenya commercial bank is a financial services provider that was established in 2015. An inclusion of a mediating variable of hr capability to determine its relationship with the competitive advantage of the commercial banks presented a percentage level of 39. Analysis of determinants of profitability of commercial. A comprehensive list of the top biggest banks in kenya will always include kenya commercial bank, national bank of kenya, commercial bank of africa, barclays, just to name a few among all these banks, kenya commercial bank limited kcb is the number one local bank with operations in all the major administrative centres not just in kenya but also across east and central african countries. Equity group dropped one position allowing cooperative bank to become the second best commercial bank in kenya.
Some banks belong to local peoplecompanies while others belong to foreign individuals or organizations. Effect of credit risk on financial performance of commercial. The objective of study was to assess the effect of credit risk on financial performance of commercial banks in kenya. They play a decisive role in the development of the industry and trade. The target population for the study comprised of the 40 commercial banks. Below is the list of the top ten best commercial banks in kenya. A commercial bank is a type of financial institution that accepts deposits, offers checking account services, makes business, personal and mortgage loans, and offers basic. Specifically, the study ascertained the level of competition among commercial banks.
This include onuonga 2014 that investigated the impact of the internal bank specific factors on the profitability of the top six commercial banks in kenya. Effects of ict strategies on performance of commercial. Home resources functions of commercial banks in kenya functions of commercial banks in kenya date posted. Strategy implementation by commercial banks in kenya. To establish how inflation rates affect the performance of commercial banks in kenya. Effects of ict strategies on performance of commercial banks. Therefore kenyan commercial banks have continued to deploy huge investments in ict based strategies and training of manpower to handle the new technologies. In addition to the above theoretical arguments, a number of empirical studies have been done on bank stability. Effectiveness of digital marketing strategies on performance. To examine the effect of electronic banking on financial performance of listed commercial banks in kenya. Effects of internet banking on the financial performance of.
This study, therefore, sought to investigate the effect of employee resourcing strategies on the performance of. The banking sector in kenya comprises of the commercial banks and nonbank. Duraj and moci, 2015, kenya ongore and kusa, 20, and uganda frederick, 2015. The purpose of this study was to evaluate the determinants of banks financial performance in developing economies with a focus on kenyan commercial banks. Banks in kenya overview and guide to top 10 banks in kenya. Kenya listed commercial banks analysis cytonn fy2018. The data used covered the period 2008 to 2012 and covered all the 43 commercial banks.
The target population was a total of fortythree 43 commercial banks operating in kenya. The objective of the study was to determine the effectiveness of digital marketing. Barclays bank of kenya is one of the fortyfour 44 commercial banks licensed by the central bank of kenya, the national banking regulator. Another study by asia 2015 analysed what e banking contributed on financial performance of institutions carrying out banking activities in rwanda. The effects of central bank of kenya prudential regulations on financial performance of commercial banks in kenya doctoral dissertation, university of nairobi. The impact of interest rate caps on the financial sector. Kenya currently has 43 commercial banks, all regulated by the central bank of kenya 20 12 20 in kenya there are a total of 43 commercial banks, 10 microfinance banks and 1 mortgage finance institution all banks are regulated by the central bank of kenya. The study employed quantitative research design using panel data analysis. The purpose of the study was to investigate the current practices of credit risk management by commercial banks in kenya. Majority of the banks develop guidelinesmodels to guide the process of strategy. The study was conducted through a descriptive cross sectional survey targeting all the commercial banks in kenya. Determinants of financial performance of commercial banks. The central bank of kenya which governs banks further classifies commercial.
To establish the effect of mobile banking on financial performance of listed commercial banks in kenya. With the onset of liberalization and globalization of business operations, the banking industry in kenya, just like the other sectors in the economy, has witnessed increased competition among operators. The central bank of kenya cbk categorizes commercial banks in peer groups based of their market share index. Bank size and financial stability of commercial banks in kenya. Pdf efficiency measurement of kenyan commercial banks. In summary, below is a number list of the top 10 best commercial banks in. The objective of the study was to establish the effect of internet banking on financial performance among commercial banks in kenya. Csr activities and financial perfomance of 28 commercial banks was studied between the year 2007 and 2008. The research design adopted by the study was descriptive to examine the relationship between the variables. All the banks were considered in the study since the number of banks in kenya is small and. Credit risk mitigation strategies adopted by commercial banks.
Analysis of determinants of profitability of commercial banks in botswana christian john. Deposits in savings account are used for saving money. The specific objectives of this study were as follows. Effects of internet banking on the financial performance. Pdf effect of credit risk on financial performance of. Commercial banks are an important part of a modern economy. Introduction this paper presents findings from a quantitative research study that was carried out on the commercial banks in kenya regarding the effect of a credit reference bureau on. Out of the 43 licensed banks 35 responded giving a response rate of 83. Box 92010480100, mombasa senior assistant librarian, jomo kenyatta university of agriculture and technology mombasa cbd, 81080100. Such a bank is a financial institution that is authorized by law to receive money from businesses and individuals and lend money to them. Therefore this study aims at establishing the effect of mergers and acquisitions on financial performance of commercial banks in kenya. This has led to a high desire by bank managers to know the contribution of human resource strategies to performance. Outsourcing and performance of commercial banks in kenya. The various institutions in this sector are registered.
This study, therefore, sought to investigate the effect of employee resourcing strategies on the performance of commercial banks in kenya. Commercial banks have always played an important position in the countrys economy. The study covered the period between year 2005 and 2014. Effect of job redesign on employee performance in commercial. Keywords credit reference bureau, financial intermediation, commercial banks in kenya 1. Influence of interest rates determinants on the performance. Background of the study this section broadly discussed the concept of mergers and acquisitions highlighting how it has been done over the years by various sectors of the economy.
Role of commercial banks in the economic development of india 3 7. The effect of corporate social responsibility on the. This study proposes to examine the efficiency of private and public sector banks in kenya. The study was guided by the following specific objectives. The relationship between capital requirement and financial. The bank provides various banking products and services, such as credit cards, loans, savings, mortgages, and investments. The findings showed that bank specific factors significantly affect the performance of commercial banks in kenya, except for liquidity variable. Effects of internet banking on the financial performance of commercial banks in kenya a case of kenya commercial bank stephanie kadzo kombe and moses kimani wafula revenue accountant kenya power ltd, p. Board composition, strategic leadership and firm performance. It also owns kcb insurance agency, kcb capital, kcb foundation, national bank of kenya and all associate companies. Furthermore, according to two recent central bank of kenya cbk commercial banks credit surveys for the second and third quarters of 2017, the upward trend. Among the 31 locally owned banks, the government of kenya has a shareholding in three of them, 27 of them are commercial banks and one is a mortgage finance institution, known as housing finance. Determinants of financial performance of commercial banks in.
The capital markets authority has additional oversight over the listed banks. The general objective was to investigate the influence of interest rates determinants on the performance of commercial banks in kenya. A survey of micro and small enterprises in kitale municipality, kenya. Interest rate caps can have farreaching consequences on the composition and maturity of commercial bank loans and deposits. The licensing and regulations of the commercial banks in kenya are provided in.
Secondary data was extracted from cbk banking supervisory reports. With 168 branches, it owns the largest banking network of any of the banks in kenya. Determine the effect of task identity on the performance of employees in commercial banks in kisumu city in kisumu city. Kenya listed commercial banks cytonn q1 banking sector. The study found out that e banking systems had a major effect on how banking industries. Commercial banks that embraced ict strategies were found to have a higher growth in market share. Kenya listed commercial banks analysis cytonn fy2018 banking. Karanja and nasieku 2016 sought to examine the effect of capital on the financial performance of commercial banks in kenya. In contrast, earlier studies were mostly studies that use panel data. Kenya listed commercial banks analysis cytonn q32018 banking. Pdf bank size and financial stability of commercial banks in. Kenya commercial bank group cooperative bank equity group diamond trust bank standard chartered. Bank size and financial stability of commercial banks in.
The data on economic growth were obtained from the kenya national bureau while the data on loans were collected from the audited financial statements of the 43 commercial banks in kenya. Among all these banks, kenya commercial bank limited kcb is the number one local bank with operations in all the major administrative centres not just in kenya but. They are acting not only as the custodian of the wealth of the country but also as resources of the country, which are necessary for the economic development of a nation. There has been increased competition from local banks as well as international banks, some of which are new players in the country. Csr activities and financial perfomance of 28 commercial banks. The effect of mergers and acquisitions on financial. Kenya listed commercial banks cytonn q1 banking sector report. African banking corporation limited postal address. Commercial banks in kenya are regulated by the central bank of kenya cbk.