Abstract: The modern business environment is turbulent and characterized by a number of highly mutating factors. Both internal and external business environment can potentially affect survival, profitability and growth of businesses. This is due to existence of risks and therefore it is important for risks to be identified and controlled in order to eliminate them or lower their severity. In Kenya, Commercial banks have been reporting shrinking profits and a few have been put under receivership. In realization of the fact, this study aimed at assessing risks facing commercial banks in Kenya. The general objective of this study was to determine the influence of financial risk management practice on performance of commercial banks in Kenya. The specific objective was to determine the influence of interest rate risk management practice on performance of commercial banks in Kenya. This study adopted a descriptive research design and a panel data analysis. The target population was all 9 commercial banks that are licensed and allowed to carry out business of banking in Kakamega County. The study was adopted census sampling method because the target population is small. This study proposes to use both primary data and secondary data from the financial statements of the banks. Primary data was collected through issuance of questionnaires. Primary data analysis was done using SPSS version 23.0 and the panel data was analyzed using STATA version 12.0. Data was presented in tables and charts. The study revealed that capital risk management had a significant influence on financial performance of commercial banks in Kakamega. The study recommended that it is important for banks to have a robust framework that effectively management financial risks because they affect financial performance of commercial banks.
Keywords: Financial Risk management, Capital Risk, Performance, Commercial Banks.
Title: Influence of Financial Risk Management Practices on Financial Performance of Commercial Banks in Kenya: A Case of Banks in Kakamega County
Author: Margaret Faith Wamalwa, Dr. Clive Mukanzi
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Research Publish Journals
