EFFECTS AFFECTING FINANCIAL PERFORMANCE OF THE BANKING INDUSTRYIN KENYA (A CASE STUDY OF COMMERCIAL BANKS IN NAROK TOWN)

Abstract

ABSTRACT The empirical evidences emerging from various studies about the EffectsEffecting financial performance of banks have so far yielded mixed results that are inconclusive and contradictory .The focus of this study will be to find out various factors affecting financial performance of commercial banks. The objectives of the study will be to; examine the effect of liquidity, asset utilization ratio, and credit risk and capital adequacy ratio on the financial performance of commercial banks in Narok County. The study will adopt a descriptive survey design. The target population will be drawn from the five major commercial banks that have operated in within Narok town. The total employee population is 150. The sample of the study will consist of 45(30%) employees working in different management levels and will be selected using the both purposive and proportionate random sampling method. The questionnaire will be pretested to establish its reliability and validity for the purpose of ensuring that they are suitable for use in further analysis. A crunchable alpha value of 0.7 will be considered suitable for the reliability value. The researcher will seek authority to collect data from the managers at the commercial banks in the town using the letter of authorization provided by the university. The data will be analyzed descriptively by establishing the frequencies and percentage response. The analysis will be presented by use of tables and charts. From the findings the conclusions and recommendation of the study will be drawn. The study findings will be beneficial to the management of commercial banks in Kenya and other institutions in Kenya.