Search results

This study analyzed the moderating effect of bank size on the relationship between financial soundness and financial performance of commercial banks in Kenya.

The study employed data from 39 commercial banks for ten years from 2009 to 2018. Panel data regression model was used to analyze data.

The study results established a negative moderating effect of bank size on the relationship between commercial banks' financial soundness and net interest margin (NIM) and return on assets (ROA) with the results indicating a correlation coefficient of −0.1699 and −0.218, respectively. However, an absence of moderating effect was established when return on equity (ROE) was used as a measure of financial performance.

The paper finding recommends that banks' management and other policy makers should consider the effect of bank size while devising financial soundness policies to ensure optimal level of banks' financial soundness aimed at improving banks' financial performance. In addition, bankers associations should come up with policies to standardize asset quality management practices to ensure continuous positive performance of the banking sector.

The study shows the contribution and applicability of the theory of production in the banking sector.

The study aims to analyze the effect of financial soundness on financial performance of commercial banks in Kenya.

The study used dynamic panel model to analyze data from commercial banks for the period 2009 to 2020. The study was modeled on the concept of CAMEL approach using five CAMEL variables as financial soundness indicators. Four indicators that is, net interest margin (NIM), earnings per share (EPS), return on assets (ROA) and return on equity (ROE) were used as measures of financial performance.

Generalized method of moments results established that financial soundness had a statistically significant effect on NIM, ROA and ROE. It was also found that asset quality and earning quality had a statistically significant effect on net interest margin. In addition management efficiency had significant effect on ROE. However, the study established that capital adequacy, asset quality, earning quality and liquidity had a statistically insignificant effect on ROA and ROE respectively while capital adequacy, management efficiency and liquidity had statistically insignificant effect on NIM.

Bank managers should put into place effective financial policies to govern changes in CAMEL variables to ensure optimal banks' financial soundness to facilitate positive growth in banks' financial performance.

The current study is modeled on the concept of the CAMEL approach by employing the five CAMEL variables as financial soundness indicators. In addition, the study contributes to local literature by examining banks in a developing economy to provide reliable and relevant information on their differences to monitor their dynamics in financial soundness and financial performance which could not be provided by regional or global studies.

The paper investigates the effect of ownership structure on the financial distress of firms listed in sub-Saharan Africa.

Using secondary data from 106 non-financial firms listed in 9 selected SSA countries from 2016 to 2021, the research using paired t-tests and conditional logistic regression model analysed a sample of 174 distressed observations matched with 174 non-distressed observations.

T-tests determined significant differences between distressed and non-distressed groups concerning institutional, foreign, and local ownership. Conditional logistic results established that institutional, foreign, and state ownership significantly reduce distress. However, managerial ownership does not influence financial distress while a significant positive relationship is observed between local ownership and financial distress.

This is the first study to investigate the influence of ownership structure, including local ownership, on financial distress in SSA, employing a unique methodology of matched design and conditional logistic regression analysis. Furthermore, the paper presents cross-country evidence from emerging frontier markets, highlighting the importance of governance frameworks in firms’ stability.