Anjili, Anjichi Davis (2014) Effects of Asset and Liability Management on the Financial Performance of Commercial Banks in Kenya. Masters thesis, University Of Nairobi.
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Abstract
The objective of this study was to determine the effects of asset liability management on the financial performance of commercial banks in Kenya between the years of 2004-2013. The factors identified under AML that effect financial performance were based on the CAMEL approach which includes capital adequacy, asset quality, management efficiency, liquidity and operational efficiency. ALM deals with the optimal investment of assets in view of meeting current goals and future liabilities. It is related to the management of the risks associated with liquidity mismatch, interest rates and foreign exchange movements. Therefore, ALM is concerned with an attempt to match assets and liabilities in terms of maturity and interest rate sensitivity to minimize interest rate and liquidity risks. Financial Performance on the other hand is a measure of how well a firm can use assets from its primary mode of business and generate revenues. This term is also used as a general measure of a firm's overall financial health over a given period of time, and can be used to compare similar firms across the same industry or to compare industries or sectors in aggregation. The study adopted a descriptive design in its methodology and the researcher chose to study commercial banks due to availability of needed data and convenience. All the 43 commercial banks in Kenya were targeted for this study. Secondary data was obtained from annual Central bank of Kenya Banks supervision reports. SPSS version 20.0 was used for data analysis. The t-test with a 5% level of significance was used in the study and the correlation coefficient (r), coefficient of determination and analysis of variance (ANOVA) were calculated. The analysis showed that all the CAMEL factors had a statistically significant impact on financial performance. Based on the findings, the study recommended policies that would encourage revenue diversification, reduce operational costs, minimize credit risk and encourage banks to minimize their liquidity holdings. Further research on factors influencing the liquidity of commercials banks in the country could add value to the financial performance of banks and academic literature for further study.
| Item Type: | Thesis (Masters) |
|---|---|
| Subjects: | H Social Sciences > H Social Sciences (General) H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management |
| Divisions: | Africana |
| Depositing User: | Mr. Senay Abate |
| Date Deposited: | 21 Oct 2016 12:25 |
| Last Modified: | 21 Oct 2016 12:25 |
| URI: | http://thesisbank.jhia.ac.ke/id/eprint/1331 |
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