Relationship between commercial banking business models and financial performance for commercial Banks in Kenya
Abstract
The objectives of this study were to establish the business models applied by commercial
banks in Kenya and to establish the relationship between banking business models and
financial performance of commercial banks in Kenya. This was a descriptive survey
design. According to the Central Bank of Kenya Register, there were 44 commercial
banks as December 2008. The target population for this study was therefore all the all the
44 commercial banks operating in Kenya. Not all the banks had the data for the entire
period as some of them were still new and there are a few others that did not respond
within the time specified and were therefore construed as not being interested in the
study. Thus, the final survey incorporated 35 commercial banks. These were chosen
given that there is publicly available information on their performance. Both primary and
secondary data were collected. Primary data were collected from the management of the
commercial banks. The primary data was collected using structured questionnaires. The
questionnaires were administered using the drop-and-pick method. Secondary data was
also collected on the financial performance of commercial banks. These were collected
from the financial statements of the commercial banks for a 7 year period beginning 2002
to 2008. The 7 year period was selected because within the last 7 years, there have been
dynamic changes in the banking industry. The analysis was done in terms of descriptive
statistics such as mean scores and standard deviations. For the secondary data, a
regression was run with performance as the dependent variable and strategies (or banking
model) as the independent variable.
Sponsorhip
The University of NairobiPublisher
School of Business