Effect of Agency Banking Operation on Profitability of Commercial Banks: A Case Of Selected Commercial Banks in Nairobi County

2017 ◽  
Vol 2 (1) ◽  
pp. 123
Author(s):  
David Mchembere ◽  
Dr A O Jagongo
Keyword(s):  
Performance Indicators ◽  
Commercial Banks ◽  
Regression Models ◽  
Economies Of Scale ◽  
Secondary Data ◽  
Study Finding ◽  
Target Population ◽  
Bank Profitability ◽  
Product Array ◽  
Number Of Customers

Purpose: The purpose of this study was to establish the effects of agency banking operation on profitability of commercial banks.Materials and methods: The research design used for this study was descriptive design. The target population will be all eleven commercial banks offering agency banking. The study will conduct a census for all the banks. Data will be collected by use  of a questionnaire and secondary data. Data will be analyzed mainly by use of descriptive and inferential statistics. Descriptive statistics will include mean and standard deviation. Data will also be presented by use of graphs, pie charts and tables.Multiple regression models will be useful to find out the virtual importance of each of the four variables.Results: From the study finding agency banking branch networking is negative and a statistically insignificant factor of bank profitability. Effect of agency banking withdrawal transaction  is positive and statistically significant. Agency banking deposit transactions is  statistically significant. Agency banking accounts opening services is also a statistically significant  factor, Commercial banks performance indicators is a statistically significant factor of bank profitability. It is possible to conclude that banks do obtain economies of scale and scope when they expand their activities, mainly by mergers and acquisitions. Therefore,expanded product array and potential for cross selling result from larger size and depth of product offering.Recommendations: The study recommends that for all the commercial banks to earn more profit they ought to increase the number of customers and for their businesses to grow further they have to invest more as well as embrace the adoption of market innovative strategies.The study also recommends that the banks should emphasize on cross-selling as they  can be useful marketing tools for banks to reach segments of the population that do not yet use traditional banking services.Key words: agency banking operation, profitability, commercial banks

scholarly journals Financial Information Influencing Commercial Banks Profitability

2016 ◽  
Vol 8 (6) ◽  
pp. 166 ◽  
Author(s):  
Dhiaa Shamki ◽  
Ibrahim Khalaf Alulis ◽  
Karima Sayari
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Regression Models ◽  
Positive Influence ◽  
Bank Capital ◽  
Bank Profitability ◽  
Bank Management ◽  
Ratio Size ◽  
Multiple Regression Models ◽  
Capital Ratios

<p>The paper investigates the influence of bank capital ratio, size and loans on the profitability of a commercial bank in Jordan. It also evaluates whether returns on Assets (ROA) or returns on equity (ROE) is the better indicator that reflects bank profitability. Two Multiple regression models are used to test the influence of capital ratio, size and loans of a commercial bank on its profitability indicators measured by ROA and ROE and to detect the superiority between the two indicators for 13 Jordanian commercial banks for the period 2005-2013. The results of the study showed that capital ratio, size and loans have insignificant influence on ROA, but not on ROE except bank size. Regarding ROE, significant negative and positive influence for capital ratio and loans respectively are concluded. Although the small number of commercial banks in Jordan and some variables have not been well researched in literature, the paper presents a sight to associate bank performance/profitability proxied by ROA and ROE with its capital ratios, size and loans. Our results might assist bank management to capitalize the factors that could improve banks performance and hedge against the adverse factors.</p>

scholarly journals PENGARUH PEMBIAYAAN MUSYARAKAH, MARKET SHARE DAN MODAL INTELEKTUAL TERHADAP KINERJA KEUANGAN PADA BANK UMUM SYARIAH DI INDONESIA

2020 ◽  
Vol 5 (3) ◽  
pp. 344-361
Author(s):  
Ayu Yunita ◽  
Meutia Fitri
Keyword(s):  
Financial Performance ◽  
Market Share ◽  
Intellectual Capital ◽  
Commercial Banks ◽  
Sampling Method ◽  
Secondary Data ◽  
Target Population ◽  
Financing Market ◽  
Research Type ◽  
Research Show

The purpose of this research is to examine the influence of musyarakah financing, market share, and intellectual capital to financial performance on islamic commercial banks in Indonesia in 2013-2018. The research type used is verificative research by using Purposive sampling method. The target population of this research are 14 islamic commercial banks in Indonesia and the sample of the research are islamic commercial banks. The data used in this research are secondary data, which are gotten from for the book year ended December 31, 2013, 2014, 2015, 2016, 2017, and 2018. The result of this research show that musyarakah financing, market share, and intellectual capital silmutaneously influence to financial performance. Partially, musyarakah financing has influence to financial performance, market share has influence to financial performance, and intellectual capital has influence to financial performance.

scholarly journals Determinants of Commercial Banks’ Profitability. Evidence from Hungary

2018 ◽  
Vol 66 (5) ◽  
pp. 1325-1335
Author(s):  
Isah Serwadda
Keyword(s):  
Commercial Banks ◽  
Regression Models ◽  
Capital Adequacy ◽  
Panel Regression ◽  
Internal Factors ◽  
Bank Profitability ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Asset Quality ◽  
Panel Regression Models

This paper aims to find out whether bank‑specific (internal) factors impact on the profitability of commercial banks in Hungary for 16 a year period ranging from 2000–2015. The study employs a sample of twenty‑six commercial banks with four hundred sixteen observations. The study employs return on average assets (ROAA) as a proxy for bank profitability, and it also considers bank‑specific (internal) factors as independent variables. These include asset quality (non‑performing loans), overhead costs, bank size, net interest margin, and liquidity risk plus capital adequacy ratio. The study uses panel regressions, descriptive statistics and correlation analysis for the investigations. The panel regression models are to estimate the impact of bank‑specific (internal) factors on bank profitability. The Hausman specification test was conducted on the panel regression models in order to identify the best and appropriate model for the study. The empirical findings reveal that non‑performing loans, overhead costs and liquidity had a significant negative impact on bank profitability as bank size had a significant positive impact on profitability. However, net interest margin and capital adequacy ratio had no impact on bank profitability. The study concludes that bank size and asset quality are bank‑specific factors that have the biggest impact on commercial banks’ profitability in Hungary for the period under investigation. The study recommends that commercial banks should endeavor to manage and reduce overhead costs to be able to earn more profits since overhead costs adversely affect bank profitability. More so, commercial banks’ managers should regularly monitor credit and liquidity risk indicators as well as pursuing diversification policies of income sources while upholding optimisation of operational costs.

scholarly journals Corporate Governance, Financial Performance and Firm Value;

2019 ◽  
Vol 8 (4) ◽  
pp. 41-48
Author(s):  
Evans Machero Ochego ◽  
Job Omagwa ◽  
Stephen Muathe
Keyword(s):  
Corporate Governance ◽  
Data Analysis ◽  
Central Bank ◽  
Financial Performance ◽  
Commercial Banks ◽  
Firm Value ◽  
Secondary Data ◽  
Target Population ◽  
Capital Requirements ◽  
Mediating Effect

Firm value is dependent on corporate which leads to increased value. High valued firms attract more investors. Towards firm value protection, minimum capital requirements were raised by the Central Bank of Kenya from 250 million to 1 billion shillings on commercial banks to cushion bank shareholders value. Despite the increased oversight and regulatory efforts on corporate governance to protect and enhance firm value, some commercial banks have recorded low firm value. Hence, this study sought to investigate the mediating effect of financial performance on the relationship between corporate governance and firm value of commercial banks in Kenya. The study was anchored on Agency Theory. Explanatory research design was adopted. Target population was forty four Kenyan commercial banks, where a census was conducted. Secondary data was collected from published financial statements and bank websites for the period 2009 to 2018. STATA version 13.0 was used for data analysis. Descriptive and inferential statistics specifically panel regression was used in data analysis. The study findings established that there is a statistically significant effect between financial performance and firm value of commercial banks in Kenya. Therefore, the study concluded that firms with good financial performance have high firm value. And as such, these calls for the management of the commercial banks improve financial performance which will go a long way in improving firm value. There is also need for Central bank of Kenya, Capital Markets Authority and Nairobi Securities Exchange to emphasis on corporate governance and short term goals to enable achievement of long term goals .  

scholarly journals Effect of Mobile Banking on Financial Inclusion Among Commercial Banks in Kenya

2021 ◽  
Vol 2 (3) ◽  
pp. 184-197
Author(s):  
Harwood Kajirwa Isabwa
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Pearson Correlation ◽  
Primary Source ◽  
Secondary Data ◽  
Target Population ◽  
Financial Inclusion ◽  
Mobile Banking ◽  
Mobile Platforms ◽  
Study Results

Mobile banking is a precursor for the realization of financial inclusion among commercial banks in Kenya. The study's main objective was to determine the effect of mobile banking on financial inclusion among commercial banks in Kenya. The study adopted a positivism research philosophy. The study adopted an expo-facto research design because secondary data was the primary source data. The target population was 43 commercial banks in Kenya. The sample size was 39 commercial banks, but only ten commercial banks were selected because they had the best mobile banking apps. Inferential statistics adopted were; Pearson correlation and regression analysis. The study results revealed that mobile funds transfers significantly affect financial inclusion (β =1.697, p= 0.000). Cash withdrawals via mobile platforms significantly affect financial inclusion (β =1.195, p= 0.000). The study concluded that mobile banking has a significant effect on financial inclusion among commercial banks. In contrast, deposits via mobile platforms have a significant positive effect on financial inclusion (β =.354, p= 0.000). The study recommends that all financial institutions should adopt mobile banking as it helps to achieve financial inclusion. The banking sector should adopt the most appropriate mobile banking strategies to enhance financial inclusion.

scholarly journals “The Impact of Shadow Banks on the Commercial Bank Lending in India with Reference to the Housing Finance Sector.”

2020 ◽  
Vol 8 (6) ◽  
pp. 51-58
Keyword(s):  
Commercial Banks ◽  
Banking System ◽  
Secondary Data ◽  
Bank Lending ◽  
Bank Loans ◽  
Housing Finance ◽  
Shadow Banking ◽  
Housing Sector ◽  
Bank Profitability ◽  
The Impact

Significant variations of bank profitability in Indian commercial banks during the period 2009-2018 motivated the critical need to study the impact of shadow banking on the profitability of commercial banks in India. Shadow banking is defined as any institution that offer bank like activities but not regulated as banks. These institutions seem to be on the rise in India thus this research considered to investigate their implications to traditional banks’ profitability. The secondary data in this analysis covered a period of 10years from 2009 to 2018. The multiple linear panel regression model for the bank profitability measures; Return on Asset (ROA), was used as a dependent variable to analyze the data. Shadow banking ratios, variables were used as independent variables in the model. To measure if the loans given by banks to housing sector decreased as a result of housing finance companies, the net aggregate of loans disbursed by banks to housing sector and net aggregate of loans disbursed by housing finance companies were recorded for the past 5 years and significant analysis was made accordingly looking at the data .Shadow banking ratios were derived from monetary aggregates data that is M3, total bank loans and total bank deposits. Regression results indicated thatShadow banking only completes the banking system and has no significant impact on loans of the commercial banks in the Housing Finance sector.

scholarly journals THE EFFECT OF FINANCIAL PERFORMANCE RATIOS ON CONVENTIONAL BANK PROFITABILITY IN INDONESIA STOCK EXCHANGE

2019 ◽  
Vol 14 (2) ◽  
pp. 84
Author(s):  
Ahmad Azmy ◽  
Iqbal Febriansyah ◽  
Anita Munir
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Stock Exchange ◽  
Secondary Data ◽  
Financial Statements ◽  
Capital Adequacy ◽  
Test Results ◽  
Return On Assets ◽  
Bank Profitability ◽  
Capital Adequacy Ratio

This study aims to analyze the effect of the ratio of financial performance to the profitability of private conventional commercial banks listed on the Indonesia Stock Exchange. Retrieval of data using financial statements from fourteen conventional commercial banks. The independent variables used include Capital Adequacy Ratio (CAR), Operational Income Operating Expenses (BOPO), Non Performing Loans (NPL), and Loan to Deposit Ratio (LDR). The profitability variable is proxied by Return on Assets (ROA). This type of research is quantitative that uses secondary data. The analysis was carried out using multiple regression analysis. The results showed that, CAR and NPL had no effect on ROA, while BOPO and LDR had a significant effect on ROA. Then the F Test results show that CAR, NPL, BOPO, and LDR simultaneously influence ROA

scholarly journals Financial Innovations and Levels of Risks in Commercial Banks in Kenya

2019 ◽  
Vol 3 (III) ◽  
pp. 111-121
Author(s):  
Hassan Maalim Abdullahi ◽  
Ambrose O Jagongo
Keyword(s):  
Commercial Banks ◽  
Reliability And Validity ◽  
Secondary Data ◽  
Target Population ◽  
Internet Banking ◽  
Primary Data ◽  
Financial Risks ◽  
Inferential Statistics ◽  
Financial Innovations ◽  
The Relationship

The commercial banks need to identify the sources of the several financial risks which emanates from financial innovations, as they may affect the banks’ stability. This study sought to determine the influence of financial innovations on level of risks in commercial banks in Kenya. The specific objectives were to determine the relationship between internet banking and financial risks in commercial banks in Kenya; to explore the relationship between mobile banking and financial risks in commercial banks in Kenya; to establish the relationship between agency banking and financial risks in commercial banks in Kenya; and to determine the relationship between electronic cards and financial risks in commercial banks in Kenya. The study adopted a descriptive research design. The target population was all the 42 commercial banks registered with CBK as at December 31st 2016. The unit of observation will be the risk management managers. This was a census study. The study collected both primary data and secondary data. Primary datawas collected from the respondents through a uestionnaire while secondary data was collected from the financial statements. Prior to the actual data collection, the questionnaire was tested for reliability and validity. The collected data was analyzed through descriptive statistics and inferential statistics through aid of SPSS software Version 21. The inferential statistics entailed use of a multivariate regression analysis to establish the relationship between the variables and test hypothesis. The analyzed data was presented using of tables, charts and graphs. 

scholarly journals ELECTRONIC BANKING ADOPTION AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA, NAIROBI CITY COUNTY

2019 ◽  
Vol 4 (2) ◽  
pp. 19
Author(s):  
Priscah Jepchumba ◽  
Dr.Eddie Simiyu
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Secondary Data ◽  
Target Population ◽  
Primary Data ◽  
Unique Contribution ◽  
Electronic Banking ◽  
Descriptive Research ◽  
General Managers ◽  
Positive Effect

ELECTRONIC BANKING ADOPTION AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA, NAIROBI CITY COUNTY   1*Priscah Jepchumba 1Post Graduate Student: Kenyatta University *Corresponding Author’s Email: [email protected] 2 Dr.Eddie Simiyu Lecturer: Kenyatta University   Abstract Purpose: This research was done to establish how e- banking adoption has improved the financial performance of commercial banks in Kenya. Methods: The study used descriptive research design and structured questionnaires to collect data.The target population was all the 41 commercial banks in Nairobi. The sampling design was census where general managers and credit managers were targeted in Nairobi headquarters. The source of data was primary and secondary data; Primary data was collected from source through questionnaires while secondary data was sourced from annual central bank reports, bank financial statements as well as periodical journals and reports. Results: The findings of the study has indicated that most of the respondents had served the banking industry for a period of at least five years and education level of at least a college diploma.  The study also rejected all the null hypotheses and concluded that electronic banking has positive effect on financial performance of commercial banks.  The study has contributed to knowledge through provision of scholarly literature on electronic banking and financial performance of commercial banks in Kenya. Unique Contribution to Theory, Practice and Policy: The study’s recommendation to management is to implement strategies which: increase Speed in Electronic Services, increase investments in Electronic banking,  promote training programs to employees and adopt suitable techniques to reduce  threats to e-banking.  The study’s recommendation is that a similar research should be conducted with a moderating or mediating variable in the same industry.

scholarly journals Corporate Social Responsibility and the Performance of Commercial Banks in Kenya: A Case of Equity Bank

2019 ◽  
Vol 3 (II) ◽  
pp. 186-198
Author(s):  
Mercy Wanja Mwangi ◽  
Jane Wanjira
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Organizational Performance ◽  
Significant Influence ◽  
Commercial Banks ◽  
Secondary Data ◽  
Target Population ◽  
Bottom Line ◽  
Creative Commons ◽  
Corporate Social

The goal of this study was to explore the influence of Social Corporate Responsibility on organization Performance. It specifically sought to establish the influence of philanthropic CSR activities benefits salient to CSR activities CSR contributions and financial-focused CSR on Equity Bank performance. This study was guided by three theories namely Triple Bottom Line Theory, the Stakeholder Theory as well as the Fiduciary Capitalism Theory. This study adopted a descriptive research design. With all the 238 management staff at Equity Bank being the target population. In order to answer the research questions, the study incorporated merits of secondary data which formed a basis for comparison with findings. The findings of the study were: philanthropic CSR, benefit salient, CSR contributions and financial focused CSR, had a significant influence on organizational performance of commercial banks in Kenya. The study concludes that: Philanthropic CSR, benefit salient on CSR, CSR contributions and financial focused CSR activities had a positive and significant influence on Equity Bank organizational performance. The study thus makes the following recommendations that Equity bank management should continue to invest more in the corporate social responsibility aspect done to make the life of beneficiaries better in terms of education, health and other humanistic endeavors. They should improve on strategies that improves on the desired outcomes that accrue out of CSR activities and improve by seminars and involvement actions how the employees feel about CSR enough to warrant motivation to better productivity by them. This is an open-access article published and distributed under the terms and conditions of the Creative Commons Attribution 4.0 International License of United States unless otherwise stated. Access, citation and distribution of this article is allowed with full recognition of the authors and the source.  

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