Determinants of high profitability to commercial banks in Kenya under turbulent economic environment (A survey of banks in Nyeri County)
Achoki, Isaac Matoke
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The economic environment under which business organizations operate under was unstable and unpredictable characterized by constant changes in political, economic, technological and social cultural changes, these factors makes it difficult for organizations to put in place long term policies for effective and efficient operations, more to project returns and work towards the projected returns. The high inflation pressure attributed by high cost of basic goods and oil prices make most companies report little or no profit growth at all. The current economic ex-pansionwas also causing some problems; strong demand has raised inflation rates. Kenya like any other African state had further experienced a rapid growth in the household credit and increase in property prices. Financial institutions operating under this turbulent environment however seem to have become more resilient to shocks and banks performance has generally been good. Recent economic growth has however helped to boost banks profitability and improve asset quality. The main objective of this study therefore, was to investigate the factors that contribute to high profitability in financial institutions under the turbulent environment in Nyeri County. The study was carried out in major commercial banks. The target population for the study was the staff of these commercial banks which totals to three hundred and seventeen. For the purpose of collecting data the researcher used a questionnaire. Stratified sampling technique was used and a sample of 30010 was used for the study. For the purpose of collecting primary data the researcher used the questionnaire. Datawas collected from respondents which is both quantitative and qualitative in nature. Quantitative data "vas analyzed using descriptive statistics such as frequencies and mean scores. Qualitative data was analyzed using content analysis. The findings were then presented using tables, pie charts, and bar graphs for easier. The quantitative data was analyzed using Statistical Package for Social Sciences (SPSS). From the data collected, it is believed that bank profits are majorly drawn from bank charges and interest rates. L-, regard to data collected interest rates charged, commissions, fees levied, customer deposits, growth of Agriculture and S~IE all significantly contribute to banks profit levels.