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Determinants of Financial Performance of Commercial Banks in Kenya

Author

Listed:
  • Vincent Okoth Ongore

    (Assistant Commissioner, Kenya Revenue Authority, Kenya.)

  • Gemechu Berhanu Kusa

    (Local Economic Development and Finance Specialist, Addis Ababa, Ethiopia.)

Abstract

Studies on moderating effect of ownership structure on bank performance are scanty. To fill this glaring gap in this vital area of study, the authors used linear multiple regression model and Generalized Least Square on panel data to estimate the parameters. The findings showed that bank specific factors significantly affect the performance of commercial banks in Kenya, except for liquidity variable. But the overall effect of macroeconomic variables was inconclusive at 5% significance level. The moderating role of ownership identity on the financial performance of commercial banks was insignificant. Thus, it can be concluded that the financial performance of commercial banks in Kenya is driven mainly by board and management decisions, while macroeconomic factors have insignificant contribution.

Suggested Citation

  • Vincent Okoth Ongore & Gemechu Berhanu Kusa, 2013. "Determinants of Financial Performance of Commercial Banks in Kenya," International Journal of Economics and Financial Issues, Econjournals, vol. 3(1), pages 237-252.
    • Handle: RePEc:eco:journ1:2013-01-24
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Financial Performance; Bank Specific Factors; Macroeconomic Variables;
    All these keywords.

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • G2 - Financial Economics - - Financial Institutions and Services

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