Commercial Banks In Kenya Research Articles

Predatory Loan Processing Practices and Their Influence on Loan Performance among Commercial Banks in Kenya

Predatory Loan Processing Practices and Their Influence on Loan Performance among Commercial Banks in Kenya

The Effects of Cost Implications in the Adoption of Biometric Application Banks in Eldoret Town, Kenya

Biometric technology utilizes biological and behavioral characteristics to automatically identify individuals. The paper was guided by the question on how does cost implications affect for adoption of biometric application in authorization and identification in banks in Eldoret Town. Cost of implications does not influence for adoption of biometric application in authorization and identification in banks in Eldoret Town. Thus, this study will help government agencies, financial institutions and other corporate business in adopting biometric systems. The research indicated cost implications affects biometric application in authorization and identification in cyber security in banks where biometric applications in banks have insufficient technical infrastructure hence affecting inefficiency and ineffectiveness of bank operations. In conclusion, the research indicated that cost implications are a major indicator that influenced biometric application in authorization and identification in cyber security in commercial banks in Kenya.

Analysis of Strategic Response on Employee Performance Among NSE Listed Commercial Banks

Globally, the banking business has seen growing rivalry, necessitating the application of important consistent and skilful decisions to boost the survival rate of numerous institutions. The recent failure of some commercial banks demonstrates that strategic responses for boosting employee performance have yet to be implemented. Employee productivity in Kenya's banking sector has also declined significantly over the years. Employees are also stressed, which leads to decreased productivity, increased absenteeism, low levels of engagement, and low retention rates. The main objective of the study was to determine the influence of strategic response on employee performance among NSE listed Commercial Banks in Kenya. The study was guided by the following specific objectives; to establish the effects of market expansion, cost-cutting strategies and strategic leadership on employee performance among NSE listed Commercial Banks in Kenya. The study also investigated the moderating effect of technology adoption on the relationship between strategic response and employee performance among NSE listed Commercial Banks in Kenya. The study followed a descriptive research design approach focusing on commercial banks based in Nairobi. The target population was all the 10 NSE listed commercial banks and the study data was collected using questionnaires for a period of one month. Due to the population being small, the study used a census sampling approach to cover all 10 commercial banks in Kenya. The study used both primary data. Primary data was collected using semi-structured questionnaires containing both open ended and close ended questions. The content analysis method was used to analyse qualitative data. Quantitative data, on the other hand, was analysed using both descriptive and inferential statistics in SPSS in accordance with the research objectives. Correlation and regression analysis were used in inferential statistics to determine the relationship between the research variables. The findings were presented using tables and figures. From the analysis, it was evident that human resource practices such as recruitment of agencies to help in marketing and selling was mostly adopted. The regression analysis confirmed that strategic leadership and cost-cutting strategies are important factors affecting employee performance in the firms and that market expansion strategies may not have a significant impact on employee performance. The study found that technological strategies may not have a significant moderating effect on the relationship between strategic response and employee performance among NSE listed Commercial Banks in Kenya. The study concluded that there is a positive correlation between strategic response and employees’ performance among NSE-listed Kenyan commercial banks. The study also concludes that strategic leadership and cost-cutting strategies are significant factors affecting employee performance in among the firms. Market expansion strategies and technological strategies may not have a significant impact on employee performance in NSE-listed Kenyan commercial banks. The study further recommended that NSE-listed commercial banks in Kenya should focus on fostering a positive work environment and effective leadership to enhance employee performance. The recommended the NSE listed Kenyan Commercial Banks to continue emphasizing and investing in expansion and cost cutting practices. The study suggested that providing leadership training and support to managers and executives can help them become more strategic in their decision-making. Banks should also carefully evaluate their cost-cutting initiatives to ensure that they do not compromise employee morale, job satisfaction, or overall performance Regular evaluation of technological strategies can help identify areas for improvement and potential opportunities to leverage technology for better employee performance.

Impact of Asset Quality Compliance on Financial Performance of Nairobi Securities Exchange Listed Commercial Banks

Asset quality compliance is relatively important; however, the banking sector has undergone major financial shocks due to compliance signals. With losses experienced among commercial banks, for instance, return on assets (ROA) dropped consistently from 29% to 24% in 2019 to 21% in 2020, hence the wrong signals. The decline in the number of assets and low deposits further magnified the challenge; this led to the closure of a number of banks, such as Chase Bank and Charterhouse Bank. Furthermore, a national bank was acquired by Kenya Commercial Bank due to inefficient assets. The purpose of the study was to establish the influence of asset quality compliance requirements on the financial performance of commercial banks listed on the Nairobi Securities Exchange and hence determine the null hypothesis that asset quality compliance requirements have no significant effect on the financial performance of commercial banks listed on the Nairobi Securities Exchange. A mixed research design was applied to a population of 12 commercial banks listed at Nairobi Securities Exchange Kenya. This is comprised of causal research designs and longitudinal designs. The study employed a mixed research design and collected secondary data for a period of 5 years. The study found that asset quality requirements had a significance level of P<0.05, thus P = 0.0268, implying significance. The study concluded that assets have a significant impact on banks financial performance. The study recommends that commercial bank stakeholders should invest in assets since they lead to financial performance. The study may benefit a number of people, including bank management, the government, and future scholars.

Effect of Employee Relations Practices on Employee Performance in Commercial Banks in Narok County, Kenya

Employee performance is a critical factor for the success of commercial banks in Kenya. Commercial banks in Kenya have been facing various employee-related issues that have affected their performance, productivity and turnover. According to a survey conducted by the Central Bank of Kenya in 2019, the average staff turnover rate in commercial banks in Kenya was 14.6%. This has been attributed to various factors, such as inadequate compensation, lack of career growth opportunities, and poor working conditions. The general objective of the study was to establish the effect of employee relations practices on employee performance in commercial banks in Narok County, Kenya. The study was anchored on the Appraisal theory, Reinforcement theory and expectancy theory. The study adopted a descriptive research design. The target population was 336 managers and middle-level workers in 14 commercial banks in Narok County, Kenya. The study adopted Slovins' formula to get a sample of 182 employees. The study further adopted stratified random sampling to get the sample of each category of worker. The study collected primary data using a questionnaire. Content validity was ensured by the opinions of experts and supervisors. The reliability of the study instruments was determined by conducting a pilot test in Narok County, whereby 18 questionnaires were issued to employees in 2 banks. An internal consistency technique was adopted by utilization of Cronbach's Alpha. Data gathered in the study was both quantitative and qualitative in nature. Descriptive and inferential statistics were employed in the study. Descriptive statistics involves the use of percentages, frequencies, and mean and standard deviation. Inferential statistics involves the use of correlation and multiple analyses. After analysis, data were presented in the form of tables. The study concluded that there is a strong positive correlation between employee relations practices and employee performance in commercial banks in Narok County, Kenya. From the findings, the study recommended that commercial banks in Narok County should encourage a two-way flow of communication where employees feel comfortable sharing their ideas, concerns, and feedback with management. Moreover, commercial banks in Narok County should support employees in achieving a healthy work-life balance to prevent burnout and increase job satisfaction.

Effect of Mergers and Acquisition Strategies on Financial Performance of Commercial Banks in Kenya

Effect of Mergers and Acquisition Strategies on Financial Performance of Commercial Banks in Kenya

Corporate Governance and Financial Performance of Selected Commercial Banks in Kenya

The primary purpose of this study was to determine whether or not corporate responsibility had an impact on the bottom lines of a sample of Kenyan commercial banks. The research's specific goal was to ascertain how compensation for boards was calculated, consumer protection, nonperforming loans, and risk management on the financial performance of selected Kenyan commercial banks. This research was based on the following theories: agency theory, resource dependency theory, control theory, public choice theory and bank risk management theory. The present investigation employed an expressive research strategy. The 44 Kenyan business banks that were the focus of this analysis as at December 2022. The target respondents were the chief finance officers and credit officers. This study used a census-style methodology because the quantity of participating banks was manageable. Surveys that were semi-structured with a mix of open-ended and closed-ended questions were used to gather primary data. Descriptive statistics like frequency, average, and deviation from the mean, and inductive statistics like regression and correlation analyses were used to examine the data. After that, we use tables and figures to display the results. While respondents generally accept that board remuneration and consumer protection measures have a good impact, the statistical significance differs. NPLs are found to have a negative impact on financial performance, which is consistent with current research advocating responsible lending practices. Risk management is also seen as important; however, opinions differ. The findings of the study emphasize the significance of risk management and the good impact of board compensation and consumer protection, as well as the negative impact of NPLs. Transparent board compensation schemes, strong consumer protection measures, careful NPL management, and thorough risk management methods are among the recommendations. The study recommends future research areas to further the study on the impact of corporate supremacy in financial success. Keywords: Corporate governance Board compensation, Consumer protection, Nonperforming loans, Risk management, financial performance

Online Banking and Technical Efficiency of Commercial Banks in Kenya

Purpose: The financial sector is being revolutionized as a direct result of technological progress, with banks and other financial institutions embracing new technologies to better serve their customers online. Technological developments in the financial sector are simplifying access to financial services. The study set out to dissect the effects of Fintech on Kenya's commercial banking sector. The general objective was to establish the effect of online banking on technical efficiency of commercial banks in Kenya. The study was anchored on Theory of Constraint-Induced Innovation.
 Methodology: The entire study relied on collecting empirical data and evaluating hypothesis in a positivist way. A causal-comparative research design was used in this research. The study targeted population of Seventeen Kenyan commercial banks from the first and second tiers. The analysis relied on secondary sources of information. The gathered quantitative data was analyzed using both descriptive and inferential statistics. Numbers, medians, and standard deviations were used to characterize the data, and frequency distributions were used to determine the sample size. Models for analyzing correlations and regressions are inferential statistics. STATA was used for the data analysis.
 Findings: The study established that online banking has a positive and significant effect on technical efficiency of commercial banks in Kenya.
 Unique Contribution to Theory, Policy and Practice: The research showed that commercial banks in Kenya could benefit from investing more in their online banking systems to boost their technological efficiency.

Effects of Institutional Governance on Financial Performance of Commercial Banks in Kenya

Although the banking industry is a very important vehicle for spurring economic development and especially in least developed economies, the Kenyan commercial banks are facing financial performance constraints, leading to collapse and liquidation of numerous commercial banks. Accordingly, borrowers, depositors and shareholders are suffering enormous financial losses; which have dramatic implications for the economy of the country. The crisis in this very crucial industry has associated with poor institutional governance. Although various studies have been undertaken on institutional governance and financial performance, majority of the studies have yielded inconsistent result while others have contextual, conceptual and methodological gaps. So, this study analysed the effect of institutional governance on financial performance of Kenyan commercial banks. It adopted descriptive and diagnostic research designs to outline the characteristics of existing phenomenon. The target population was the 43 commercial banks licensed and operating in Kenya. Since the sample size was easily accessible and manageable the study used census. Data was collected using primary sources using a questionnaire, Data was analysed using quantitative analysis approach to produce descriptive statistics and thereafter multiple regressions to estimate a model. The study found that at 5% significance, level board size, ownership concentration, audit structure and, board composition, positively and significantly affects financial performance of licensed Kenyan Commercial Banks. The study recommends that Kenyan Commercial Banks should review their board size policies, largely focus on having audit committee, and strengthen their board composition guidelines to ensure board diversity comprises.

Regulation and agriculture financing in Kenya

PurposeThe agricultural sector remains the backbone of several emerging economies, including Kenya, where it contributes 34% to its gross domestic product (GDP). However, access to financing for agricultural activities appears to be very low compared to developed economies. Following this, governments in a number of countries have sought to introduce banking sector regulations to facilitate increased funding to the agricultural sector. Taking motivation of the interest rate capping regulations by the Central Bank of Kenya (CBK) in 2016, this paper examined the effect of these interest rate ceiling regulations on agri-lending in Kenya.Design/methodology/approachThe paper employs random effects technique to estimate a panel data of 26 commercial banks in Kenya from 2014 to 2018 using the ratio of loans to agricultural sector to gross loans and the natural logarithm of loans to agricultural sector as proxies for agri-lending. Bank size, equity, asset quality, liquidity, revenue concentration and bank concentration are employed as control variables.FindingsThe results of the panel regression estimations show that the introduction of the interest cap resulted in increases in the proportion and growth in agri-lending compared with the pre-interest cap period. In addition, large banks and highly capitalised banks were found to be associated with lower agri-lending, with differences in the effects across pre-cap and post-cap periods.Practical implicationsFrom a policy perspective, the findings highlight the effectiveness of interest rate capping in meeting this objective and supports the calls for strengthening cooperation between the government and key stakeholders in the financial sector. This will allow for the effective enforcement of policies by the regulatory powers in a manner that guarantees sound and dynamic financial systems, particularly within the agricultural sector.Originality/valueAs far as the authors are aware, this the first paper to examine the effect of the interest rate cap regulation on agri-lending in Kenya.

The effect of capital adequacy on the Value of Commercial Banks in Kenya

Well-functioning banks diminish not only the transaction costs, but also the moral hazard and asymmetric information issues observed in the financial market. Despite the role played in financial inclusion, commercial banks in Kenya have seen increased liquidity risk, declining profitability and credit risk that has weakened the sector's stability. This research sought to establish the effect of capital adequacy on value of commercial banks in Kenya. The study was anchored on four main theories including Capital Structure Irrelevance Theory, Interest Rate Theory, Signaling theory and liquidity preference theory. This study adopted an explanatory research design and followed a positivism research philosophy. The study involved all the 43 commercial banks in Kenya which were selected using census sampling. The study covered a 7-year period between 2014 and 2021. Secondary data was used for the study and was obtained from the audited annual financial reports of the commercial banks in Kenya and CBK. The collected data was analyzed by uses of descriptive and inferential analysis with the help of Statistical Package for Social Sciences (SPSS) version 26 and STATA. Tables and figures were used to present the analyzed data. The study established that Capital adequacy has a positive impact on the commercial banks value in Kenya. The study concludes that financial soundness indicators such as capital adequacy are more important in determining the ability of a bank to produce value for its share-holders. The study recommends banks to improve their capital adequacy by retaining profits or raising new capital through various means such as issuing new shares, selling assets, or borrowing from financial institutions. Additionally, banks to improve their asset quality by adopting effective risk management strategies and banks should improve their management efficiency by investing in employee training and development programs, adopting technology to automate processes, and streamlining operations. Commercial banks can improve their liquidity by implementing effective liquidity risk management strategies.

The effect of Asset quality on the Value of Commercial Banks in Kenya

Well-functioning banks diminish not only the transaction costs, but also the moral hazard and asymmetric information issues observed in the financial market. Despite the role played in financial inclusion, commercial banks in Kenya have seen increased liquidity risk, declining profitability and credit risk that has weakened the sector's stability. This research sought to determine the effect of asset quality on commercial banks value in Kenya. The study was anchored on four main theories including Capital Structure Irrelevance Theory, Interest Rate Theory, Signaling theory and liquidity preference theory. This study adopted an explanatory research design and followed a positivism research philosophy. The study involved all the 43 commercial banks in Kenya which were selected using census sampling. The study covered a 7-year period between 2014 and 2021. Secondary data was used for the study and was obtained from the audited annual financial reports of the commercial banks in Kenya and CBK. The collected data was analyzed by uses of descriptive and inferential analysis with the help of Statistical Package for Social Sciences (SPSS) version 26 and STATA. Tables and figures were used to present the analyzed data. The study established that Asset Quality has a positive impact on the commercial banks value in Kenya. The study concludes that banks should improve their asset quality by adopting effective risk management strategies and banks to improve their management efficiency by investing in employee training and development programs, adopting technology to automate processes, and streamlining operations. Commercial banks can improve their liquidity by implementing effective liquidity risk management strategies. The study recommends the banks to improve their asset quality by adopting effective risk management strategies.

Influence of Credit Risk Management on Financial Performance of Commercial Banks in Kenya

The management of credit risk in commercial banks determines the banks' financial performance, which predominantly influences the quality of the loan portfolio and the nature of credit administration programs as a whole. By ensuring that credit risk is effectively managed, the primary objective of credit risk management is to generate a high-quality, stable, large, and growing flow of net interest income for banks. This objective is achieved by ensuring that banks can meet the needs of their customers. This study determined the effect of credit risk management on the financial performance of Kenyan commercial banks. The investigation was founded on the portfolio theory. The paradigm of Positivism served as the philosophical foundation for the investigation. The study incorporated both explanatory and longitudinal research designs into its methodology. The study's target population consisted of 32 Commercial Banks in Kenya. The study utilized panel data consisting of time series and cross-sectional data spanning a decade from 2010 to 2019. Using Eviews, descriptive and inferential statistics were used to analyze the collected data, which was then presented in tables and figures. The study found out that Credit risk management had an insignificant negative relationship with Return on Equity (ROE) (F=87.02884, p<0.05) and Return on Assets (ROA) (F=118.1208, p<0.05). Arising from the study findings, it is observed that credit risk management has a negative effect on financial performance measure either in ROA or ROE, it is recommended that commercial banks should keep this parameter as minimum as possible so as not involve in loss making undertakings.

Effect of Macroeconomic Factors on Financial Performance of Commercial Banks in Kenya

The Kenyan banking industry plays a vital role in economic development of the country. However, performance in the banking sector has not be satisfactory given that there are commercial banks that have collapsed while others are under receivership or operating under statutory management. In light of this fact, the purpose of the study was to investigate the effect of macroeconomic factors on financial performance of commercial banks in Kenya. The study was informed by the following objectives: to determine the effect of exchange rate on financial performance of the commercial banks in Kenya; to establish the effect of real Gross Domestic Product on financial performance of the commercial banks in Kenya; to assess the effect of inflation rate on financial performance of commercial banks in Kenya; and to determine the effect of real interest rate on financial performance of the commercial banks in Kenya. The study utilized a causal research design and carried out a census of all the 35 commercial banks that were fully operational for the period 2011-2019. The study used secondary data, which was extracted from the Central Bank of Kenya, Kenya National Bureau of Statistics, and banks’ audited financial statements. Both descriptive and inferential statistics were used in data analysis. Panel regression model was used to establish the effect of macroeconomic factors on financial performance of commercial banks in Kenya. Presentation of data was aided by tables and diagrams. The findings of the study showed that exchange rate and interest rate significantly affected financial performance of commercial banks in Kenya. On the other hand, GDP growth rate and inflation rate did not significantly affect financial performance of commercial banks in Kenya. The study concluded that exchange rate and interest rate affected financial performance of commercial banks. Conversely, the study concluded that financial performance of commercial banks in Kenya was not affected by GDP and inflation rate. The study recommends that policy formulation in the banking sector should take into consideration the exchange rate as the basis of managing its effect on financial performance. Moreover, the study recommends that commercial banks should moderately raise their interest rates in the quest to increase profitability in the banking industry.

Mobile Banking Services, Risk Management, Firm Characteristics, and Performance of Commercial Banks in Kenya

An increasing number of banks in Kenya are launching newer mobile banking platforms which has led to increase in competition in the banking sector, where each commercial bank is penetrating to ensure that they keep in their competitive perspective and attract more likely customers by bringing the services of mobile banking next to their doorsteps. However, it is not clear how characteristics of a firm and management of risks influence the relationship the services of mobile banking and performance of banks in Kenya. The main objective of this research was to find out the relationships among the services of mobile banking, management of risks, characteristics of firms and performance of banks in Kenya. The specific objectives were: to evaluate the effect of mobile banking services on performance of banks, to institute the effect of risk management on the state between mobile banking services and performance of commercial banks, to investigate the effect of firm characteristics on the relationship between mobile banking services and performance of commercial bank and finally, to determine the combined effect of mobile banking services, risk management and firm characteristics on performance of banks. This study used the CAMELs Model evaluation system that examines capital adequacy, asset quality, management capacity, income, and liquidity of banks and therefore establishes the overall unsoundness of banks to measure operation. The study used a positivism research philosophy and descriptive research design. The study consisted of 43 commercial banks and utilized correlation and regression analysis to institute the relationship among mobile banking services and performance of bank. The Baron and Kenny (1986) formulation was used to test the intervening and moderating effect of management of risks and firm characteristics respectively on the relationship between mobile banking services and banks performance. Finally, the multiple regression analysis was used to test the joint result of mobile banking services, risk management, and firm characteristics on the banks performance H01 results indicate that a significant relationship between account-to-account transfer, mobile money, and the performance, H02 indicate that the relationship between mobile banking services, liquidity risk and bank performance is statistically significant whereas the relationship between mobile banking services, market risk and performance is not statistically significant. H03 indicate that the size of a firm have no significant effect on the relation between mobile banking services and performance of banks and H04 indicate that mobile banking services, risk management and firm characteristics have significant effect on the performance of commercial banks. The study is contributing to the theory of information systems since it has shown how increase in the use of mobile banking services which leads to improved performance of banks. The study recommend to regulators to ensure management of risks is adhered to in mobile banking services by commercial banks in Kenya to better operation.

Effect of Product Innovations on Strategy Implementation Process of Commercial Banks Listed on Nairobi Securities Exchange

Purpose: The purpose of the study was to establish the effect of product innovations on the strategy implementation process of commercial banks listed on Nairobi Securities Exchange.
 Methodology: The study applied descriptive research design. The study targeted 159 participants including senior managers, credit officers, accountants, human resource managers, operations managers and relationship officers from each of the 11 NSE listed Kenyan commercial banks. The size of sample size was 69 selected using stratified random sampling method. The independent vriable (product innovations) was assessed by looking at new products adopted by banks such as credit cards, insurance products, new deposit accounts and mortgages while dependent variable (strategy implementation process) was assessed through operationalization and institutionalization of strategy. The study utilized research questionnaires for collecting primary data. The distribution of the questionnaires was done by dropping them to the respondents and collecting a week later. Descriptive and” inferential statistics were utilised for data analysis.
 Findings: The study established the product innovations adopted by the bank were mortgages represented by 97%, credit cards (95%), new deposit accounts (90%) and insurance products (49%). It was established that few banks had embraced insurance products probably because of many insurance agencies in the market. The study found that a unit increase in product innovations results to 0.706 increase in strategy implementation process in commercial banks listed in NSE in Kenya.
 Unique contribution to theory, practice and policy: The study concluded that product innovations have a substantial effect on strategy implementation process in commercial banks listed in NSE in Kenya The study recommended that managers at banks should consistently make an effort to invest in innovative product designs and modify the current products in order to enhance strategy implementation process. The research also recommends future studies should explore the factors affecting the execution of strategies in financial institutions in Kenya, beyond just commercial banks. This would encompass SACCOS, microfinance institutions, and mortgage companies.

Competitive Advantage Practices and Performance of Commercial Banks in Nairobi County Kenya

Over the recent years, competition in the Kenyan banking industry has increased, resulting to various banks adapting key practices to increase their competitive advantage. Hence, this research focused on the competitive advantage practices and performance of commercial banks, in Nairobi County Kenya; a case of Equity Bank, Kenya Commercial Bank, Absa and Family Bank. Over the recent past, the performance of commercial banks has been influenced by different factors such as liquidity, capital inadequacy and the efficiency of operational costs. The study’s objective was; to find out how differentiation strategy, innovation, focus strategy and cost leadership. Some of the theories applied include porters five forces, resource-based view, stakeholder, and balanced scorecard model. The research applied a case study method, with detailed questionnaires which examines the respondents on practices used by Commercial banks in Nairobi County. Also, it examined on how such practices enhance performance in the county. The summary of the regression model correlation coefficient explains the interdependence between the independent variables, differentiation, focus strategy, cost leadership, innovation and the dependent variable, which is performance. Key respondents of this study were employees and customers of the sampled Commercial banks in Nairobi County, with a focus of Branch managers, regional managers and departmental managers. Data was collected using questionnaires, with open ended questions. Reliability test was undertaken, and analysis done through multiple regression and inferential statistics. The expected outcome is that the four main practices would become useful to Equity Bank management, future researchers, and the government. The study concluded that commercial banks use differentiation strategy to provide customers with something unique, different and distinct from items their competitors may offer in the marketplace. Innovation plays a key role in introducing novelty to existing product lines or processes, leading to increased market share, revenue, and customer satisfaction. Focus strategy identifies the market segments where the bank can compete effectively. Implementing Cost Leadership Strategy creates a different market size for each product and each industry. The study recommended that the commercial banks need to produce or design extremely unique or distinctive products or services that create increased value for the consumer. Commercial banks should ensure that they truly understand their customers’ needs; establish collaborative relationships with their business partners, allocate resources for training and development etc. The commercial banks should use customer satisfaction ratings from past months what led to high scores, and what could use improvement to develop a proper focus strategy and also consider the demographics of their current clientele.

Influence of Transformational Leadership on Risk-Based Pricing Model: A Case of Kenya Commercial Banks within Nairobi County

This study investigated the impact of transformational leadership on commercial banks' implementation of the riskbased pricing model in Nairobi County, Kenya. While the Kenyan government, through the Central Bank of Kenya (CBK), has advocated for its usage, many commercial banks are still wary. The study examined the impacts of idealized influence, intellectual stimulation, customized consideration, and inspirational motivation, and was based on transformational leadership and arbitrage pricing theories. Using a cross-sectional descriptive research design, data was collected from 234 credit managers from various commercial bank tiers within Nairobi County, employing a stratified sampling technique. The data collection involved the administration of closed-ended questionnaires, and the collected data was analysed using SPSS version 25.The findings revealed that all the transformational leadership dimensions significantly and positively influenced risk-based pricing model (p<0.05). These results indicated that employing transformational leadership strategies can foster a culture of risk-taking and encourage risk-based pricing in commercial banks.

The Effect of Lending Interest Rates on the Financial Performance of Commercial Banks in Kenya

The Effect of Lending Interest Rates on the Financial Performance of Commercial Banks in Kenya

Effect of Corporate Culture on the Performance of the Kenya Commercial Bank

Over the last seven years, Kenya Commercial Bank (KCB) management has initiated various restructuring processes, such as "moving from good to great" positioning strategy, rebranding tactics, value concerns, and behavior reassessment. These restructuring strategies are meant to place the financial institution as the market leader in the banking industry, not only in Kenya but also to encourage it to become a pan-African bank. Indeed, the bank has demonstrated strength in its branch network, accounting for 359 branches, an asset base of 1.1 trillion Kenya shillings (Ksh) as of 2021 financial results, and a significant market share command of 22.5 million customers. However, the human effort applied in explaining the milestone achievements cannot go unnoticed, especially the corporate culture of the bank employees, which is operationalized through involvement culture, consistency, adoptability, and mission cultures. Therefore, the objective of this paper was to interrogate the implication of corporate culture on the performance of Kenya Commercial Bank. The paper employed a qualitative and quantitative research design. Qualitative data was analyzed by using descriptive statistics such as total scores, percentages, and frequencies. Quantitative data was analyzed using Pearson correlation and regression analysis. Primary data was collected using a structured questionnaire and interview guide targeting senior management and worker representatives. The data was analyzed using Pearson correlation and regression analysis. The finding was that corporate culture had a positive and significant effect on Kenyan commercial bank performance. This was evidenced by positive and significant correlations between performance and all corporate culture sub-variables, as follows: involvement culture (r = 0.584, p<0.01), consistency culture (r = 0.541, p<0.01), adaptability culture (r = 0.566, p<0.01), mission culture (r = 0.576, p<0.01), and organization factors (r = 0.517, p<0.05). These findings shed light on the interconnectedness of these variables and how they collectively contribute to an organization's success and effectiveness. Based on the findings, the paper recommends that there should be relevant activities undertaken by the bank to promote corporate culture because they have a positive influence on the performance of the bank and that organizations should consistently apply the various aspects of corporate culture at the strategic, functional, and operational levels.