Determinants of Financial Performance of Commercial Banks in Kenya

Authors

  • Vincent Okoth Ongore Kenya Revenue Authority
  • Gemechu Berhanu Kusa Kenya School of Monetary Studies

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.

Keywords: Financial Performance; Bank Specific Factors; Macroeconomic Variables 

JEL Classifications: E4; G2

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Author Biographies

Vincent Okoth Ongore, Kenya Revenue Authority

Assistant Commissioner, Domestic Taxes Department

Gemechu Berhanu Kusa, Kenya School of Monetary Studies

Researcher Banking and Finance

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Published

2013-01-03

How to Cite

Ongore, V. O., & Kusa, G. B. (2013). Determinants of Financial Performance of Commercial Banks in Kenya. International Journal of Economics and Financial Issues, 3(1), 237–252. Retrieved from https://econjournals.com/index.php/ijefi/article/view/334

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