Capital Level and Financial Stability of Commercial Banks in Kenya
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Date
2024-04
Authors
Kilonzo, Alex Mutisya
Atheru, Gerald
Journal Title
Journal ISSN
Volume Title
Publisher
EdinBurg
Abstract
The soundness of banks' finances serves as the foundation for the entire financial sector because
they are essential to promoting economic growth. A commercial bank's financial stability
should be assessed with specific emphasis given to domestic and foreign issues that affect how
the bank operates and figuring out the amount of their influence on the status and operations of
the commercial bank. Nevertheless, the impact of the company's capital, liquidity, and asset
quality on the financial stability of commercial banks has not been studied. This study aimed
to evaluate the effect of capital level on licensed commercial banks’ financial stability in Kenya.
The research was anchored by capital buffer theory. The explanatory research design was
adopted to analyze thirty-nine banks for the period 2016 to 2022 based on the census approach.
The study outcomes were arrived at using secondary data obtained under the guidance of the
secondary data collection schedule. The assessment of the investigation was evaluated
premised on descriptive and panel approaches. The findings indicated that capital level had a
positive and significant effect on the financial stability of commercial banks. The study
recommended that commercial banks should adopt strategies and measures that will enable
them to increase the capital level leading to an increase in financial health.
Description
Article
Keywords
Capital level, financial stability, commercial banks
Citation
Kilonzo, A. M. ., & Atheru, G. . (2024). Capital Level and Financial Stability of Commercial Banks in Kenya. Journal of Finance and Accounting, 4(1), 9–17. Retrieved from https://edinburgjournals.org/journals/index.php/journal-of-finance-and-accountin/article/view/262