Effect of Firm Size on Financial Performance on Banks: Case of Commercial Banks in Kenya
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Date
2018
Authors
Muhindi, Kibet Alex
Ngaba, Domnic
Journal Title
Journal ISSN
Volume Title
Publisher
International Academic Journals
Abstract
The Kenyan banking sector has undergone
through intense shakeups in recent time. It
was worth to look into which business
models that banks should adopt in order to
survive. The size of a firm plays a very
crucial role in determining the nature of
association between the functional
atmosphere and external environment. The
size of a firm matters in this new age of
intense competition. The research sought
to determine the effect of firm size on
financial performance of commercial
banks in Kenya. To obtain this objective,
the study used a descriptive survey. The
variables entailed; the number of branches,
capital base, number of customer deposit
and the loan and advances.The population
of the study constituted all the 42
registered commercial banks in Kenya
classified in to large, medium and small
banks. During the fiscal year ended June
30, 2016, there were 42 commercial banks
and 1 mortgage finance company. The data
was gathered from the bank’s financial
reports and central bank supervision
reports for 5 years period from 2012-2016.
This research was limited by the operating
environment as it was characterized by
risks and uncertainties due to its
tumultuous nature of banking sector. The
research made good use of secondary
data; however, the researcher took note of
their limitation in terms of rigidity and its
historical nature. The study was affected
by macroeconomic and microeconomic
factors such as regulations and technology.
The researcher increased the sample size
of the source of data in order to increase
the level of reliability and validity of the
results. The result of the study is helpful to
academicians, policy formulators,
researchers, Investors and Customers and
managers of organizations.
Description
A research article published in International Academic Journal of Economics and Finance
Keywords
firm size, financial performance, commercial banks, Kenya
Citation
Muhindi, K. A. & Ngaba, D. (2018). Effect of firm size on financial performance on banks: Case of commercial banks in Kenya. International Academic Journal of Economics and Finance, 3(1), 175-190