The Effect of Gross Loan Portfolio on the Value of Listed Commercial Banks in Kenya
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Date
2022Author
Ombese, Frankline N
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
The study aimed to assess the impact of gross loan portfolio on the value of Kenyan
commercial banks. Contextually, it prioritized banks listed at NSE. It set out specific
variables such as; real estate loans, retail and personal, enterprise and trade loans,
and agricultural loans. The assessment provided a diligent inquiry into research
questions, bridging the research gap. Notably, the period of study spanned from
2017-2021. In addition, the population entailed eleven registered listed commercial
banks. Panel data on listed commercial banks were collected across five years to
investigate the connection between gross loan portfolio and bank value. The study
was executed with the assistance and reliance on secondary cross-sectional panel
data design. Data was obtained from the respective listed kenyan banks annual and
published statements, historical data from the Nairobi securities exchange as well as
Central Bank. Quantitative techniques were employed in data analysis; collected
data was tabulated and presented to make easy to understand and interpret. SPSS
statistical analysis software was used in this research to manipulate the data and
visualize the results. This ANOVA p-value of 0.05 shows that the model was
statistically significant. The regression analysis showed a 56.4% correlation among
the variables that were under study however, only retail and personal loans
alongside trade and enterprise loans had a significant relationship with bank value.
The model summary also shows that 31.8% variation in banks' value was caused by
agricultural , Real estate , enterprise and trade loans and retail and personal loans. It
is worth emphasizing that real estate loans, retail and personal loans, agricultural
loans, and enterprise and trade loans played a pivotal role in the bank's value. The
evaluation of the loan diversification portfolio recommends strengthening of
policies that increase the performance of loans and sealing loopholes that create
avenues for defaults. Stressing on the need for a diversification strategy to avoid the
negative association of bad loans on value of the bank. Finally, in a replicate study
addition of other predictor variables, moderating and intervening variables can
spearhead the conclusive findings.
Publisher
University of Nairobi
Subject
Effect of Gross Loan PortfolioRights
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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