Abstract: A progressive banking sector withstands negative economic shocks and helps in enhancing the stability of the financial system. The return on equity of commercial banks in Kenya has been experiencing a decline. The decline has brought concerns from different quarters of the financial sector and other stakeholders. The study aimed at establishing the impacts of bank specific characteristics on return on equity of commercial banks in Kenya. The specific objectives were to establish the effect of bank size, management efficiency and asset quality on return on equity of commercial banks in Kenya. The study focused on 43 banks listed by CBK at 2017. The study was based on casual research design. The study focused the period 2014 to 2017, where panel regression analysis was used. The outcome from the examination was that bank size and management efficiency have significant positive effect on return on equity of commercial banks in Kenya. Asset quality has an insignificant negative effect on return on equity of commercial banks in Kenya. The study therefore recommends that banks should utilizing assets by investing in other ventures to maximize profits and by extension performance. The research suggests that focus should be placed on the banks’ operating income as this in turn raising the banks’ performance. Subsequent studies can replicate this in other segments of the financial sectors by focusing on SACCOs and Micro Finance Institutions.
Keywords: Bank Specific Characteristics, Bank Size, Management Efficiency, Asset Quality, Return on Equity.
Title: BANK SPECIFIC CHARACTERISTICS AND RETURN ON EQUITY OF COMMERCIAL BANKS IN KENYA
Author: ESBON KIUNJURI MWANGI, CHARITY NJOKA
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Research Publish Journals
