Ghanaian Banking Research Articles

EFFECT OF CUSTOMER SATISFACTION AND MARKETING COMMUNICATION MIX ON CUSTOMERS’ LOYALTY IN THE GHANAIAN BANKING INDUSTRY

The study investigates the effect of customer satisfaction and marketing communication mix on customers’ loyalty in the Ghanaian banking industry. Explanatory design was used to investigate the association between the independent variables: customer satisfaction, public relations, advertising, sales promotion and the dependent variable: customers’ loyalty. Questionnaire was the main instruments for data collection from 250 customers of banks in Accra, Ghana. SPSS version 20 was employed for data analysis. The study revealed a strong positive relationship between customer satisfaction and customer loyalty in the Ghanaian banking industry. Also, the study showed a moderate but significant relationship between public relations and customers’ loyalty in the Ghanaian banking industry. On the bases of these findings, the study recommended that the banks should continue to strive to achieve customer satisfaction by fulfilling customers’ needs and wants since it can engender customer loyalty. This can be done by understanding all the factors affecting customer satisfaction. Also, it was recommended that public relations must not be discarded but strengthened to complement the other marketing communication mix to help encourage customer loyalty in the Ghanaian banking industry. Article visualizations:

 Electronic Banking: an Object of Fallacy or System of Functionality Samuel Affran Abstract — Corporate managers in the banking industry have employed series of strategies to lure many customers to patronage their categories they offer for sale. One of s

Corporate managers in the banking industry have employed series of strategies to lure many customers to patronage their categories they offer for sale. One of such is E-banking. These technological services are introduced by banks with the objective of providing customers with rapid services, with cost efficient. The situation tends to be different in this part of the world. Most of these services partially exist and if it fully does, it comes with unprecedented system failures. Based upon this premises this study is conducted exploratory to find out what really constitutes electronic banking from the Ghanaian perspective and also to ascertain their linkage with customer satisfaction. A total number of 200 questionnaires were administered. Cross-sectional survey was employed using questionnaire as the principal tool for the data collection. A 5-point Likert- scale ranging from 1 (strongly disagree) to 5(strongly agree) was used to measure the constructs. With the aid of SPSS version 23 the data was analyzed to establish the empirical linkage of the underlying constructs. The study among other things brought to the fore three (3) determinants (Automated Teller Machine, Mobile Phone Banking, Internet or Online banking) that define e-banking from the Ghanaian perspective proving that it is a system of functionality that is established for specific strategic purpose better still because of inefficient execution it was also proven to be an object of fallacy in the sense that having it does not necessary leads to customer satisfaction. The data analysis also shows that statistically between automated teller machine and customer satisfaction there is positively very weak relationship (R^2= .181, p< 0.126). Meaning holding all other variables constant, automated teller machine will cause 18.1% change in customer satisfaction. It is proven by the results that, automated teller machine not only weak in explaining the relationship but the impact is also not significant as the significant level is 0.126 which is above the standard significant value of 0.05. Meaning the automated teller machine if it is not administered efficiently and effectively will have the tendency to impact on customer’s satisfaction insignificantly. This presupposes that the automated teller machines in question were not administered efficiently and effectively. Thus this study has proven empirically that it is not a forgone conclusion that having an ATM services will automatically leads to customer satisfaction making the assertion a fallacy in Ghana thus disproving the study by Sultan and Komal (2009) claiming that having an automated teller machine services will automatically lead to customer satisfaction. The study revealed that relationship between mobile banking services and customer satisfaction is positively very weak (R^2= .170, p< 0.171). This simply means that mobile services rendered by banks to their customers were seriously criticized as woefully inadequate. Thus, holding all other variables constant, mobile banking services causes 17.0 % change in customer satisfaction. This result proves that a unit change in mobile banking service will induce 17.0% change in the rate of customer satisfaction. In other words when the level of mobile banking services is improved by 1% it will lead to 17.0% increase in customer satisfaction which is quite negligible. The significance level of this outcome in reference to the study results was 0.171 which is greater than the standard value of 0.05 indicating that the variance between mobile banking services and customer satisfaction was not significant. Internet banking services were quite effective and efficient thus having positive significant impact on customer satisfaction (R^2= .211, p< 0.003). But the relationship is equally weak explaining only 21.1% of customer satisfaction within the Ghanaian banking industry. The statistical understanding is that unilaterally internet banking service has the empirical tendencies to increase customer satisfaction by 21.1% if these services are improved just a percentage change. The practical connotation is that managers need to make automated teller machine more secured and very convenient spreading it across the length and breadth of the country. It should be in good function (twenty-four hours a day), accessible at all times (weekdays and weekends) and user-friendly as well. Again, managers should be proactive in sending message to customers whenever their system is malfunctioning in order to win customer trust. They should be ready to accept their mistakes and improve on customer complaint. They should avoid the rationalization of system failure which tend to put customers off serving as a catalyst for customer drifting. Again, internet connectivity should be reliable to boost mobile banking services. The banks should create more mobile apps for the various product categories. To sum up more resources should be allocated to online products since it is proven to be the only determinant significant in explaining customer satisfaction.

Cost efficiency and welfare performance of banks: evidence from an emerging economy

PurposeThe study examines the relationship between the consequential social cost of market power (i.e. welfare performance of banks) and cost efficiency using data covering the period 2009 to 2017 from the Ghanaian banking industry.Design/methodology/approachThe study adopts the ordinary least squares (OLS), fixed effect (FE) panel regression and the quantile regression (QR) approaches to control for heterogeneity and provide increased room for policy relevance. The two-stage least squares instrumental variables (2SLS-IV) regression is used to ensure the robustness of the findings against the problem of possible reverse causality.FindingsThe results indicate a positive relationship between banks' welfare performance and cost efficiency, which suggests that greater cost efficiency hedges welfare losses. In other words, welfare gains and cost-efficient banks are not mutually exclusive. Also, the results show evidence that the sensitivity of welfare gain to cost efficiency depends on the knowledge of local market dynamics. Further, the findings from the QR estimation suggest that, but for welfare loss at low (Q.25) to the median (Q.50) quantiles, cost efficiency is a necessary and sufficient condition to hedge the welfare losses.Practical implicationsThe results demonstrate that financial consumer protection cannot be achieved without cost efficiency in the presence of both foreign banks and high market knowledge. Therefore, our paper suggests an integrated cost efficiency policy approach that has the complementary effect of a robust information sharing mechanism and incentives to hedge against welfare losses in the banking sector of emerging economies. Moreover, if welfare gain is synonymous with cost-efficient banks, then the presence of a quiet life is typical of financial consumer protection.Originality/valueThis study provides insight into the importance of cost efficiency to the public policy of financial consumer protection in an era of foreign banks' dominance. From the review of prior literature, this paper is the first to apply the QR estimation technique to examine the effect of cost efficiency throughout the conditional distribution of bank welfare performance rather than just the conditional mean effect of cost efficiency.

Determinants of Credit Risk in the Banking Sector of Ghana: A Panel Co-integration Approach

The economic development of any nation hinges on the health of its financial system. In recent years, the health of the Ghanaian Banking sector has been affected severely as a result of high levels of non-performing loans (NPLs), which has been identified as a major threat to the overall profitability and survival of banks. To minimize the impact of NPLs on the financial sector, key stakeholders such as the government, bank officials and regulators are working hard in that regard. However, any policy response aimed at dealing with the high rate of non-performing loans first requires the understanding of the underlying determinants of NPLs. Against this backdrop, this paper apply panel co-integration techniques to investigate the determinants of credit risk (NPLs) in the banking sector of Ghana. We use NPL as a proxy to measure credit risk and assess how it is influenced by macroeconomic and bank-specific factors. A balanced panel data of 16 universal banks in Ghana from 2010 to 2016 has been analyzed using Panel co-integration techniques such as Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS). Our result shows that growth in the economy, measured by Gross Domestic Product (GDP) has significant influence on the NPLs of banks in the long-run. The results further revealed that capital adequacy, profitability and liquidity of banks are significant predictors of NPLs. However, our results suggest that bank size, inflation and interest rate have statistically insignificant influence on the NPLs of Ghanaian banks. The study recommend, among others, that whereas it is important for government and policymakers to work to improve macroeconomic outcomes, banks should also improve their capital adequacy, profitability, and efficiency position as these bank-specific interventions could significantly improve credit quality and minimize NPLs.

Bank risk, profit efficiency and profitability in a frontier market

PurposeThe study examines the impact of risk on the profit efficiency and profitability of banks in Ghana.Design/methodology/approachData envelopment analysis was used to estimate profit efficiency scores and accounting ratios were used to measure profitability. The panel corrected standard error regression was used to assess the nexus using a dataset of 32 banks from 2000 to 2015.FindingsThe paper found that the Ghanaian banking industry exhibits a variable return to scale property, suggesting that average costs change with output size. Profit efficiency score for banks closer to the efficiency frontier is 61%. Credit risk is significant in enhancing profit efficiency and return on equity. Market risk is relevant in improving profit efficiency, return on asset and asset turnover. To drive profitability, bank managers have to be committed to effective liquidity risk, insolvency risk and capital risk management. Operational risk reduces shareholders' returns. The impact of size, age, stock exchange listing, cost efficiency and competition have are all been discussed extensively.Practical implicationsThe findings contribute to the knowledge on the risk-performance nexus and provide information that is valuable to academics, bankers and regulators for policy formulation. The findings are relevant to the newly established Financial Stability Council.Originality/valueThis paper appears to be among the premier attempts to examine the effect of various risk types identified in the Basel III framework on bank performance in Africa.

The impact of ICT on Financial Sector Policy Reforms in Post-Financial crisis era in Ghana:

Ghana, like most other developing countries, is not isolated from the global financial crisis through the impact of such a crisis on economies. This paper examines the financial sector reforms and its effect on the Ghanaian economy, within the developing country context in general and in sub-Saharan Africa (SSA) in particular. The paper seeks to enhance the understanding of relevant policy measures and reflects on what else could be done. The article further studies the effect of change in the institutional environment on bank governance practices primarily to improve the industry’s supervision and regulation, related to the post-crisis exit strategies. This paper discusses the development of ICT infrastructure and application as a basis for the main dimension of Ghana’s digital transformation in financial services. This paper is, therefore, motivated by the lack of empirical studies that examines how the impact of the banking reforms play a substantial role in promoting innovative digital payment systems to replace cash transactions. From the perspective of institutional theory, the study looked at why (and how) a number of policy measures have a significant impact on the financial performance of banks? And how the applications of e-finance in ICT and financial practices, provides several benefits within the banking sector improve the sector’s image and leads to a broader, faster and more efficient market? The application of Koppenjan and Groenewegen (2005) ‘s four-layer model ‘levels of institutional analysis’ perspective seems to be the most useful starting point, which provides the basis for an improved understanding of revealing the inefficient delivery of Ghanaian banking industry in the past. A combination of a review of secondary and empirical data, interviewed used in the analysis. Findings indicate that the financial and banking sector reforms help the industry advance digital banking culture and impact on the general expansion of the financial and the infusion of financial inclusion in Ghana. These conclusions would be particularly useful in a similar picture in other developing countries, as well as by the bank authorities to create their future policy. It also joins the debate on the impact of the banking reform, a key turning point towards better regulation to refine crisis prevention and resolution mechanisms.

Assessing the Effects of Credit Risk Management on Financial Performance of Selected Banks in the Ghana Stock Exchange

The study explored the effect of credit risk management and its relationship to financial performance in the Ghanaian banking sector. This study adopted the explanatory research design. In this study, census sampling was used to select four (4) banks. These banks were Access Bank, Agricultural Development Bank, Ghana Commercial Bank, and Republic Bank. Data for the study constituted secondary data which were obtained from published audited annual report of the banks and the Ghana Banking Survey. The study adopted the regression analysis. The results indicated that credit risk has a negative relationship with performance in the banking sector. Specifically, credit risk related negatively with capital adequacy ratio, asset quality, management quality, earnings and profitability and liquidity. The concept is that increase in credit risk means bad credit risk management and vice versa. The implication therefore is that an increase in credit risk management give rise to increase in financial performance. The study recommended that training programmes be organized for credit officers on effective client monitoring. For the customers, there is the need to design and implement adequate credit management programmes to educate clients on proper management of loans. The policy and procedures should be living documents that reflect current and emerging credit practices. Keywords: Credit Risk Management, Financial Performance, Ghanaian Banking Sector. DOI: 10.7176/RJFA/11-12-08 Publication date: June 30th 2020

The Influence of Motivation on the Performance of Employees in the Ghanaian Banking Sector

This study focused on motivational factors and their influence on employee performance in the Ghanaian Banking Sector. The reason for conducting the study was that there has been a problem of employee demotivation in the financial institutions. The research was a survey in the commercial banks in the Accra, the Capital City of Ghana. Data were collected from managerial employees in the Head Offices of the financial institutions. The researcher used questionnaires and interviews as research instruments. Quantitative data was analysed using SPSS while thematic analysis was used in qualitative data analysis. The findings of the study were that most of the banking entities had fairly ‘young’ employee base that tended to put high valence of extrinsic motivational factors, and that the Financial Institution was providing inadequate extrinsic motivation, which was not in sync with the ‘young aged’ employee base it had. Most of the participants were in agreement that inadequate motivational factors were responsible for poor job performance. The research showed that inadequate salary and other motivational factors like quality of work life, promotion, supervision, and teamwork lead to counterproductive work behaviour. However, respondents also highlighted that indirect remuneration was being used to ensure adequacy of extrinsic motivational factors and there were efforts to provide housing to the employees in the Financial Institution. The factors responsible for employee demotivation included lack of organisational capacity to provide adequate extrinsic motivational factors. In addition, ineffective performance appraisal systems were a challenge being faced by most banks. The study recommended that the leadership in the financial institutions needed to be aware of the needs of the junior employees and be able to meet those needs. Provision of indirect remuneration could help in motivating the junior employees. There was also need to have ethical codes of conduct to prevent counterproductive work behaviour like absenteeism, lateness, job turnover, loafing, anti-social behaviour, and theft/fraud. Financial Institutions needed to provide equitable remuneration, and training and development of the employees.

Does corporate governance explain the quality of bank loan portfolios?

PurposeThe purpose of this study is to assess the impact of corporate governance variables on the quality of bank loan portfolios.Design/methodology/approachThe study used a panel-corrected standard errors estimation model with the most recent 11-year data from 2006 to 2016 on selected Ghanaian banks.FindingsThe findings indicate that corporate governance is relevant within the banking sector and plays a key role in improving loan quality. Having a large board with the attendant pool of expertize, boards with mostly non-executive members and duality of the CEO-board chair can be harnessed to improve bank loan quality. Female participation on boards seems to detract from good performance, creating the impression of tokenism in the Ghanaian banking sector.Originality/valueThe study has important implications for board construction within the banking sector and the discourse on bank asset quality.

Determinants and convergence of income diversification in Ghanaian banks

The study explores the determinants of income diversification, as well as, test for the existence of beta-convergence and sigma-convergence among Ghanaian banks. The study utilizes a dataset of 32 banks covering the periods 2000 to 2017. The panel corrected standard error ordinary least squares, fixed effects and system generalized methods of moments have been used. Both beta-convergence and sigma-convergence exist among Ghanaian banks; suggesting the presence of the catch-up effect and similarity of strategy over time. The risk profile and risk portfolio of banks affect their diversification strategy. Banks that are faced with high insolvency risk and liquidity risk tend to diversify while banks that are faced with low credit risk tend to diversify. Stable banks tend to adopt a diversification strategy even when they are exposed to credit risk. Network embeddedness drives diversification strategy. The implications of the study for practice, policy, and future research have been discussed.

Effects of Risk Assessment, Control Environment and Control Activities on Performance of Listed Banks in Ghana

Globally, internal controls serve many important purposes for public private and public help organizations. There is however an increasing call for better and improved internal control systems especially in firms that are listed on public market. However, internal control systems, irrespective of how well conceived and implemented cannot provide absolute assurance of management and boards regarding the achievement of objectives. This research focused on the three components of internal control systems namely control environment, risk assessment, and control activities. This study therefore formulated four objectives and investigated how risk assessment, control activities, and control environment affects the performance of Ghanaian banks. In this quantitative study, representatives from twelve listed banks were engaged. Descriptive and regression analysis was performed on the field data. The study result shows while Risk assessment has a strong significant effect on financial performance, Control environment and Control activities, have a weak significant effect on financial performance. The practical implication of the study is that, when assessing the performance of banks, risk areas must be examined critically to reduce or eliminate their impacts on bank performance.

Antecedents and consequences of staff related fraud in the Ghanaian banking industry

PurposeThe purpose of this paper is to investigate the antecedents and consequences of employee fraud, focusing on the banking industry in Ghana.Design/methodology/approachA major bank was selected for the case study analysis. The researchers employed qualitative data analysis for the study. Content analysis of investigation reports and interviews of employees from different functional areas were used as the main data collection tools.FindingsThis study found that loans contracted by bank employees with huge repayment amounts put financial pressure on them to commit fraud. The study also found that inadequate controls in some areas of the bank can fuel the commission of fraud. In addition, aggrieved employees have highly chances of committing fraud. Huge punitive consequences were noted to exist for the employee who perpetrates the fraud and shareholders are also affected by the fraudulent behaviour of employees.Research limitations/implicationsFindings shown in the study confirm the hypotheses of the fraud triangle theory on the causes of fraud in spite of its criticisms. The findings are also consistent with extant studies on the antecedents and consequences of fraud. The use of one bank for the case study analysis as well as the three-year analysis period imposes a limitation on the study. Future studies can explore fraud using other different theoretical lenses. Gathering data from more than one bank and for a longer period of analysis may provide more accurate results.Practical implicationsThis study provides some recommendations for fraud prevention in the banking industry in Ghana. The major one is the need for the central bank to collaborate with financial institutions to set up an effective credit worthiness system that will aid the monitoring of activities of the banks. Banks should also ensure that systems of controls are reviewed regularly to identify and deal with fraud.Originality/valueThis study is original, as it focuses on an industry that is highly susceptible to fraud because of issues of confidentiality with data and with the scanty literature on fraud.

The impact of new foreign banks strategies on banking in Africa

With the deregulation and liberalisation of the Ghanaian financial sector, the Ghanaian banking sector has seen an influx of new foreign banks, which are competing very well in this market. However, there is limited research on the impact of the strategies and impact of these new bank's operations in the host country. Using a qualitative and the interview method, data was collected from a case of four foreign banks operating in Ghana and analysed using cross-case comparative analysis. The findings from the study reveal that the exposure of foreign bank strategies in domestic markets leads to both positive and negative impacts. The operations of these foreign banks impact positively on their performance with higher profits and a negative impact on domestic bank's profitability. This paper explores these empirical findings and presents its implications for foreign bank's operations in the domestic markets of an emerging economy.

Corporate governance in banks: impact of board attributes on banks performance

The study examines the impact of board of directors' composition on firm performance in the Ghanaian banking industry. Using the GMM, fixed and random effect econometric models, the presence of independent non-executive directors (INEDs) on boards is found to significantly and positively contribute to higher bank performance in terms of return on assets. Board size is also found to have significantly influenced banks performance positively with respect to both return on assets and return on equity, but negatively affects net profit margins of banks. The study further establishes that board members' political attachment has a profound adverse influence on firm performance particularly on net interest margin. These findings provide further insights on the impact of board attributes on firm performance in the banking industry, especially in a developing and under researched context. Research and practical implications are discussed.

Psychosocial hazards and work engagement in the Ghanaian banking sector

PurposeThe current happenings in the Ghana banking space and anecdotal evidence suggest that employees face psychosocial issues which impact their levels of work engagement. An intervention to manage these psychosocial hazards and promote work engagement among the employees is necessary. In effect, the study has proposed the promotion of a positive psychosocial safety climate (PSC) therein. Therefore, the purpose of this paper is to examine the moderating effect of PSC on the relationship between psychosocial hazards (i.e. work stress, workplace violence and workplace bullying) and work engagement.Design/methodology/approachThe study gathered quantitative data from six commercial banks. Miller and Brewer’s (2003) sample determination formula was used to calculate the sample. The stratified random sampling technique was used to select the respondents. Questionnaires were used for the data collection, and Structural Equation Modelling was used to analyze the data from 543 usable responses.FindingsWorkplace bullying negatively predicted work engagement, whereas work stress and workplace violence had no significant effect on work engagement. PSC had a significant positive effect on work engagement. Furthermore, PSC only moderated the workplace bullying–work engagement relationship.Originality/valueBased on the findings, PSC can be a national and organizational intervention promoted to create a positive psychological work environment devoid of such psychosocial hazards in the Ghanaian banking sector. Also, this will foster work engagement among the employees which will culminate into increased productivity.

Managerial Leadership Style and Employee Commitment: Evidence from the Financial Sector

Employees’ poor performance within the banking sector has become evident in recent times, and studies on how leadership styles affect employee commitment in the Ghanaian banking sector is scanty. The purpose of this article is to examine the effect of leadership styles on employee commitment after controlling for demographic and institutional factors. The study also examines whether there is a difference in the leadership style due to the gender of leaders and determines the dominant leadership style among bank managers. A sample of 160 leaders and subordinates were selected from 10 commercial banks. The study employed hierarchical regression as well as independent sample t-test techniques. Financial organizations were chosen because much of the existing studies on leadership styles have focussed on non-financial sectors. The findings of the study indicate that transactional leadership is the most dominant leadership style practised within the banking sector. After controlling for demographic and institutional variables, laissez-faire and transformational leadership behaviours have significant positive effects on employee commitment. Although transactional leadership style is dominant, it contributes only 4.8 per cent to employee commitment as compared to 51 per cent by transformational leadership style in eliciting employee commitment. There is an evidence that, married employees are more likely to be committed employees than the unmarried, but as the employee’s number of children increases, commitment level falls. Although all the three leadership styles have positive effects on employee commitment, transactional and laissez-faire leadership styles are most significant. This is the first study in Ghana to show that there is no significant difference between the sexes when it comes to exhibiting leadership styles in the banking sector. The findings of this study provide useful information for policy-makers to improve employees’ commitment levels and their performance by means of stimulating the right leadership styles in the managers.

Sectoral Loan Portfolio Concentration and Bank Stability: Evidence from an Emerging Economy

In this study, the effect of sectoral loan portfolio concentration on bank stability is investigated in the Ghanaian banking sector between 2007 and 2014. Specifically, we investigate the linearity and non-linearity effects of sectoral loan concentration on bank stability given the limited exploration of this nexus. Employing a two-step generalized method of moments (GMM) robust random and fixed effects panel models of 30 banks, the study provides evidence showing that sectoral loan concentration weakens the stability of banks. This confirms the concentration-fragility hypothesis and the diversification theory of traditional banking but may promote bank stability beyond a certain threshold point. This implies that bank sectoral loan concentrate has a direct non-linear U-shape effect on bank stability in Ghana. We argue that although sectoral loan concentration may weaken stability of banks in the short run, it may however enhance the stability of banks in the long run through prolonged expert knowledge, experience and understanding of sectors. From these findings, policymakers, regulators and bank managers must not only develop and design policies and regulations that prohibit sectoral loan concentration but should also incorporate plans and policies that encourage banks to develop core competence and competitive advantage to take advantage of advancing bank stability through sectoral loan concentration. JEL Codes: G10; G18; G41

Consumer Welfare Effect of Banks’ Lending Services in the Ghanaian Banking Industry

The study examines the relationship between the consequential social cost of market power (i.e. welfare performance of banks) and cost efficiency using data covering the period 2009 to 2017 from the Ghanaian banking industry. The study adopts the Ordinary Least Squares (OLS), Fixed Effect (FE) panel regression and the Quantile regression (QR) approaches to control for heterogeneity and provide increased room for policy relevance. The Two-Stage Least Squares Instrumental Variables (2SLS-IV) regression is used to ensure the robustness of the findings against the problem of possible reverse causality. The results indicate a positive relationship between banks’ welfare performance and cost efficiency, which suggests that greater cost efficiency hedges welfare losses. In other words, welfare gains and cost-efficient banks are not mutually exclusive. Also, the results show evidence that the sensitivity of welfare gain to cost efficiency depends on knowledge of local market dynamics. Further, the findings from the QR estimation suggest that, but for welfare loss at low (Q.25) to the median (Q.50) quantiles, cost efficiency is a necessary and sufficient condition to hedge the welfare losses. The results demonstrate that financial consumer protection cannot be achieved without cost efficiency in the presence of both foreign banks and high market knowledge. Therefore, our paper suggests an integrated cost efficiency policy approach that has the complementary effect of a robust information sharing mechanism and incentives to hedge against welfare losses in the banking sector of emerging economies. Moreover, if welfare gain is synonymous with cost-efficient banks, then the presence of a quiet life is typical of financial consumer protection. This study provides insight into the importance of cost efficiency to the public policy of financial consumer protection in an era of foreign banks’ dominance. From the review of prior literature, this paper is the first to apply the QR estimation technique to examine the effect of cost efficiency throughout the conditional distribution of bank welfare performance rather than just the conditional mean effect of cost efficiency.

Recapitalization of Banks: Analysis of the Ghana Banking Industry

Recapitalization of banks has been a topic of discussion between politicians, economists, bank regulators, academicians and the general public due to its role in the country’s economic growth. This reform has been implemented in a number of countries to improve a strong banking system of which Ghana is not an exception. The main objective of the study is to ascertain the effects of recapitalization on the Ghanaian banking sector. In a decade (2007 to 2017) there have been 3 various recapitalizations (2007, 2012 and 2017) of the Ghana banking industry. The study is conducted to prove if the recapitalization of banks has been worth it using the 2012 exercise as the benchmark. Various literatures are reviewed, and scholars cited. The study adopts quantitative research technique based on ex-post factor design. It uses secondary data on the research variables (cost to income ratio, profit before tax, non-performing loans, return on assets, return on equity, Net interest margin, capital adequacy ratio, liquidity ratios, asset quality ratios) over the period 2007 to 2018. Analytical techniques of both descriptive statistics and independent sample test were adopted for the study. The t-test for equality of means was used to ascertain evidence of statistically significant difference in banking sector performance indicators and the Levene’s test for equality of variance was also adopted. The study concludes that banking recapitalization has the potential to promote the performance of banks in the industry. Hence it was recommended that the central bank (BoG) initiates sufficient regulatory measures to sustain the benefits of banking recapitalization to benefit depositors and the nation as a whole.

Corporate Social Responsibility and Bank Performance: A Co-integration Approach

The aim of this study is to examine the short- and the long-run effects of Corporate Social Responsibility (CSR) on the performance of listed Ghanaian banks. An elongated balanced panel design with secondary data of 65 years’ bank observations spanning 2004 to 2016 was used for the study. A co-integration approach – Pooled Mean Group (PMG/Panel ARDL) – was used to examine the short- and the long-term effects of CSR on bank performance while controlling for bank variability, growth in interest income and bank size. The results were mixed. In the short term, it was found that CSR has positive but insignificant effect on bank performance (market-to-book value). In the long-term, however, CSR has significant negative effect on bank performance. Based on the findings, the study concludes that, in the long run, engaging in CSR reduces bank performance. Therefore, CSR needs to be carefully planned and implemented to serve as a boost to bank performance and not just regarded as an inconsequential addendum.