| dc.description.abstract | Company size plays an important role in determining the kind of association the
company enjoys within its functional atmosphere and external environment. Size of a
firm plays vital role in competing with competitors through the cost reduction and
more opportunities to take advantage of. The study sought to determine the effect of
bank size on profitability of commercial banks in Kenya. To achieve this objective the
study used a descriptive survey. The population of the study constituted all the 43
commercial banks in Kenya. The data was gathered from financial statements and
records. Data analysis was done using a regression model. The descriptive findings
concluded that commercial banks had a sufficient capacity to generate profitability
from their assets. However, this was dependent on some factors like efficiency of the
bank, its credit policies, and management and investment decisions. Bank size is
moderately positively correlated to profitability of commercial banks in Kenya. The
regression results conclude that logarithm of asset was statistically significant since its
probability value obtained from the regression model above was below (5%).
Liquidity, operating efficiency and capital adequacy were found to be statistically
insignificant since their p-values are more than 5%. The limitation of this study is that
the business environment is characterized by risks and uncertainties due to its
turbulent nature. Macroeconomic factors for example regulations, technology and
other microeconomic factors might have affected the findings obtained in this study.
The empirical findings found in this study might be useful in guiding central bank of
Kenya in setting policies and procedures that encourage commercial banks to grow
and expand to enjoy some of the benefits that accrue for large firms like access to
credit facilities and economies and scale. This will provide a platform for commercial
banks to borrow and invest in capital projects in order to realize profitability. | en_US |
