Oseko, Deborah and Ng’eno, Elijah and Mose, Naftaly (2024) Bank-specific and Macroeconomic Determinants of Commercial Banks Profitability in Kenya. Asian Journal of Economics, Business and Accounting, 24 (10). pp. 368-378. ISSN 2456-639X
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Abstract
This study focuses and examines the impact of bank-specific factors and macroeconomic determinants on the financial performance of commercial banks listed on the Nairobi Securities Exchange (NSE) during the period spanning from 2011 to 2020. The research is anchored on transaction cost economic theory with financial panel data methodology. In the pursuit of study objective, the study employed pooled ordinary least squares (OLS) estimation method combined with fixed effect model to account for individual-specific characteristics that may not be directly observable but are likely to impact the dependent variable. The research findings reveal that bank assets, bank capital and debt ratio have a positive impact on bank profitability while bank concentration has a negative effect. Notably, inflation rate, lending rate and tax rate were insignificant in relation to rate of return on equity among the selected banks in NSE. The study recommends that banks should prioritize efficient capital allocation and diversify their business lines and offerings. Therefore, banks should give thought to the implementation of strategic asset management as a means to optimize their asset allocation, as it can contribute to increased profitability through diversification and efficient asset utilization.
Item Type: | Article |
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Subjects: | Archive Paper Guardians > Social Sciences and Humanities |
Depositing User: | Unnamed user with email support@archive.paperguardians.com |
Date Deposited: | 29 Oct 2024 07:05 |
Last Modified: | 29 Oct 2024 07:05 |
URI: | http://archives.articleproms.com/id/eprint/2953 |