Effect of Bank Efficiency Strategies on Firm Financial Performance among Banks in Kenya
Main Article Content
Keywords
Bank efficiency strategies, firm financial performance, bank size, and bank liquidity
Abstract
It is generally acknowledged that changes in interest rates have a significant impact on bank performance. The implementation of interest capping in Kenya not only affected bank performance but also altered bank strategies, including bank efficiency strategies. The objective of the study was to determine the effect of bank efficiency on bank financial performance among banks in Kenya. The study underpinning theory was the balanced scorecard model. The study used explanatory research design. Through this approach, the study sought to explain the relationship between variables and to identify the cause-andeffect relationship between bank efficiency strategies and firm financial performance. The target population for this study was 42 banks in Kenya and 35 banks were surveyed after the inclusion exclusion criteria. The fixed regression results for Bank Efficiency Strategies showed a positive and significant effect on firm financial performance (β= 0.4331749, p= 0.000). This means that a unit increase in bank efficiency strategies increased bank financial performance by 0.4331749 units. The findings imply that banks efficiency strategies such as restructuring, consolidation and digitization during interest capping period paid-off and that cost management at the various phases of a firm is a sustainable survival strategy in the wake of volatile business environment.
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Hillary Sitienei , Department of Management Science and Entrepreneurship, School of Business and Economics, Moi University, P. O. Box 3900 30100, Eldoret - Kenya
Department of Management Science and Entrepreneurship, School of Business and Economics, Moi University, Eldoret, Kenya
Michael Korir, Department of Management Science and Entrepreneurship, School of Business and Economics, Moi University, P. O. Box 3900 30100, Eldoret - Kenya
Department of Management Science and Entrepreneurship, School of Business and Economics, Moi University, Eldoret, Kenya
Naomi Koske , Department of Accounting and Finance, School of Business and Economics, Moi University, P. O. Box 3900 30100, Eldoret - Kenya
Department of Accounting and Finance, School of Business and Economics, Moi University, Eldoret, Kenya