Relationship between investment in intangible assets and financial performance of Commercial Banks in Kenya
Abstract
Commercial Banks in Kenya have undertaken strategic initiatives to improve financial
performance. Some of these banks consider that the cumulative gains in efficiency are
much greater over time than those, which come from irregular radical changes. However,
many of these short- and medium-term gains are quickly eroded and absorbed into the
industry standard and therefore cannot be depended upon as a prerequisite for survival
and growth. The objectives of this study were to establish the relationship between
computers fixed assets and financial performance of commercial banks in Kenya and to
investigate the relationship between investment in intangible assets and financial
performance of commercial banks in Kenya. Intangible assets comprise of capitalized
computer software costs which are amortised over the estimated useful lives usually three
to eight years according to generally accepted accounting principles and reported in line
with international financial reporting standards.
This research problem was best studied through the use of exploratory research design
The study made use of secondary data when investigating and collecting both quantitative
and qualitative data. The data collected presented through summarized percentages,
proportions and tabulations. Mean scores and standard deviations were evaluated.
The study concludes that the key variable being financial performance in 2006 is causing
commercial banks in Kenya to increase investment in more intangible assets (computer
software) and computer assets and equipment thus resulting in an increase in ROA and
profitability as shown by the descriptive statistics.
Sponsorhip
University of NairobiPublisher
School of Business, University of Nairobi
Description
Master Thesis