| dc.description.abstract | To ensure financial stability and growth of the Kenyan banking industry, it’s necessary
to find out the factors that affect the financial performance of the sector. The objective
of this study was to determine the effect of selected internal factors on the financial
performance of banks listed at the NSE. The period covered in the research was five
years, that is, from 2010 – 2014. The study used descriptive statistics, Pearson
correlation, regression analysis and ANOVA to analyze the data that was collected.
Return on Assets (ROA) was used as a measure of financial performance. The findings
revealed that Capital Adequacy, Liquidity, Operational cost efficiency and Size of the
bank do significantly affect the financial performance of commercial banks listed at the
Nairobi Stock Exchange (NSE). The results suggest that the government should set up
policies that encourage commercial banks to raise their capital base. This will ensure
that the banks are cushioned in case of a country wide financial crisis. Commercial
banks need to invest in efficient technologies that will further enhance their
management of operational costs. Income diversification is a field that the commercial
banks need to venture further in so as to make the banks more competitive in the market.
The findings concluded that the selected factors considered only covered 53% of the
financial performance and that there was need for further research on the remaining
47%. | en_US |
