dc.description.abstract | The objective of this study was to determine the effect of financial restructuring on the
financial performance of commercial banks in Kenya. Generally, the expectation is that
financial restructuring when employed by the management of a firm; it should have some
effects on the performance of the firm, in this case the performance of the commercial
banks.
The study was conducted on 11 commercial banks in Kenya, all of which are listed in the
Nairobi Securities Exchange and which were in operation in Kenya during the six-year
period of the study that is from 2008 to 2013. The various ratios that make the variables
under consideration, namely debt ratio, dividend payout ratio and equity ratio of these
commercial banks were computed from the various data collected and extracted from the
annual financial statements of the said listed commercial banks for the period of study.
The data was then analyzed using a multiple linear regression model using SPSS
version 20, to establish if there was any effect of financial restructuring on the
financial performance of these commercial banks and if existent; how significant the said
effect would be.
The finding of the analysis concluded that there exists a positive effect of financial
restructuring of the financial performance of commercial banks in Kenya. However, the
analysis further showed that the effect was very minimal and could only explain 26.7% of
financial performance leaving the other more than 70% unexplained, at least not in the
findings of the analysis of this study. The commercial banks in Kenya therefore, need to
consider other factors even as they employ financial restructuring to enhance financial
performance of their firms with a view to ensure survival in a competitive market while
meeting their social objective. | en_US |