The Effects of International Financial Reporting Standard Number 9 on the Performance of Kenyan Commercial Banks Listed at the Nairobi Securities Exchange
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Date
2021Author
Nyangidi, Doughlas, O
Type
ThesisLanguage
enMetadata
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The introduction of ECL model of IFRS 9 by the IASB for implementation by financial institutions beginning January 2018 to enhance banks financial stability and to avoid a repeat of the financial crisis which was experienced in the year 2008 brought a lot of debate on the effects of the IFRS 9 on banking sectors. It is due to that fact that the Researcher carried out a study to find out the effects of IFRS 9 on the performance of Kenyan listed commercial banks. The study period was between the 2015 and 2020, this led to the study period being divided into phases; phase one was the entire research period (2015 to 2020), phase 2 was the pre IFRS 9 period (2015 to 2017) while phase 3 was the post IFRS 9 period, that is between 2018 to 2020.The dependent variable of the study was performance measured as ROE while the independent variables were credit risk, LLP and capital adequacy. The study revealed that impact of the independent variables on the performance was 53.9%, 31.7% and 60.6% for the entire study period, pre and post IFRS 9 period respectively. It further revealed that credit risk is one of the factors which largely and significantly have a negative effect on performance. The study used descriptive statistics, Pearson correlation and regression analysis to describe, correlate and regress the collected data. The data was collected from published financial reports for each listed commercial banks from the CBK’s annual banking sectors supervision reports, individual banks audited financial reports and the NSE reports on listed commercial banks. The study recommended that the bank management and oversight and regulatory authorities should set policies to ensure that the credit risk is mitigated and controlled and in addition to that, the management should ensure that clients are strictly vetted to help reduce credit risk and loan loss provisioning.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- School of Business [1411]
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