Effects of Selected Financial Market Regulations on Financial Performance of Commercial Banks Listed in the Nairobi Securities Exchange

Abstract

This research looked to examine the impact of selected financial regulations on the performance (financial) of banks listed in the NSE in Kenya. It focused on the Capital requirement, liquidity management and corporate governance and their effect on the fiscal performance of commercial banks listed in Kenya. The banks performance was gauged using the ROA. The study took up a descriptive research design to analyze the relationship between selected financial regulations and financial performance of banks listed in the NSE in Kenya. The population of study was eleven banks listed in the Nairobi securities exchange. The response rate was 100% of the total population which makes eleven listed commercial banks. The resulting data was gathered from the yearly reports of the eleven commercial banks. The data was analyzed using Advanced Excel. This study noted that all measures of capital requirement and corporate governance are significant predictors of fiscal performance of listed banks in Kenya, while liquidity management was not significant in explaining the profitability of the listed banks in Kenya. Based on the findings, another study should be conducted to determine the other financial regulation determinants of the financial performance of listed banks in Kenya. Financial institutions are the major drivers of growth in many developing nations. The study recommends the Government of Kenya to ensure that financial institutions operate in the interest of the depositors, owners and the economy as whole. Financial institutions also must carry on their activities in a manner not to interfere with the financial wellbeing of all its stakeholders.