Impact of Civil War on Financial Performance of International Banks in South Sudan

Abstract

The study sought to explore the effect of civil war on financial performance of international banks in South Sudan. It focused on the 2013 abrupt SPLM party internal power struggle which degenerated into a national armed conflict. Civil war can exterminate infrastructural facilities as well as human resources, a situation that has the likelihood to significantly impact on both people and business organisations. War negatively affects the sales, exports, and de-cisions to invest for any firm regardless of size or incumbency. This affect the allocation of resources and output levels among the firms in existence and also on their entry and exit (Camacho & Rodriguez, 2010), circumstances of which international bank performance large-ly reflected after the recent conflict in South Sudan. The study investigated the bi-variate pe-riod performance of the international bank by comparing the pre-ante and post ante financial performance within the 6 years before and after the civil war in South Sudan in order to de-termine the influence of unrest on the performance of banks. Measuring performance finan-cially entails assessing the returns on assets. The study concluded that the financial perfor-mance of international banks in South Sudan was significantly influenced by the civil war that broke out in 2013. The study established that civil wars in South Sudan had a significant in-fluence on performance of the international banks. The researcher recommended that state political stability and vulnerability to armed conflict ought to be carefully assessed by cross border traders and international trade investors before establishing especially financial institu-tions.