Evaluation of financial performance of commercial banks in Kenya
Abstract
This study was carried out to achieve one key objective namely, to establish
whether there is any significant difference between the performance of the
locally established banks and the foreign banks with operations in Kenya.
Secondary data on financial performance of banks was obtained mainly from
commercial bank's financial statements and CBK Bank Supervision. The data
was analyzed using MS Excel statistical package to obtain averages of the various
financial performance ratios for both local and foreign banks. Using the same
statistical package, trend analyses were done over the study period so as to
compare the two categories. Finally t-tests were performed so as to test the
hypothesis that there is no significant difference between the financial
performance of local and foreign banks.
The results realized from the study showed that, of the eight ratios used, two
indicated that there is no significant difference between the financial
performance of the two categories. However, the rest of the ratios (six) showed
that there is a significant difference between the financial performance of the two
categories. Hence the overall conclusion was that there is a significant difference
in financial performance of the two categories. The trend analyses showed that
the financial performance of the local banks was poor, just as the general
economic situation in the country as shown by the NSE Index over the study
period.
Sponsorhip
University of NairobiPublisher
School of Business, University of Nairobi