Relationship Between Profitability and Financial Deepening Among Commercial Banks in Kenya
Abstract
The objective of this study was to establish the relationship between profitability and financial
deepening among commercial banks in Kenya. The study adopted a descriptive survey design covering quantitative methods. The study targeted 39 commercial banks operating in Kenya and
census was used. Secondary data was gathered over a period of 5-years (2016-2020) and analyzed through descriptive and inferential statistics. The findings were that ROA (β=.112, t>1.96 & p<0.05), ROE (β =.101, t>1.96 & p<0.05), bank size (β =.119, t>1.96 & p<0.05) as well as capital adequacy (β =.105, t>1.96 & p<0.05) were all significant predictors of financial deepening among commercial banks in Kenya. The study concludes that profitability is a significant predictor of
financial deepening. The study recommends that finance managers of commercial banks in Kenya should come up with sound strategies aimed at improving profits so as to contribute towards
financial deepening. The policy makers of the commercial banks in Kenya should develop sound
policies and strategies aimed at enhancing the profits generated and thus improving on financial depth. The policy makers at the CBK should develop relevant and sound regulations that encourage and promote financial deepening among commercial banks. The policy makers at KBA should also develop relevant policies for their members that encourage financial deepening.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- School of Business [1411]
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