Authors :
Mathina Ruth Wanjiru; Dr. Ruth Mathina; Dr. Ambrose Jagongo; Dr. Lucy Wamugo
Volume/Issue :
Volume 7 - 2022, Issue 8 - August
Google Scholar :
https://bit.ly/3IIfn9N
Scribd :
https://bit.ly/3KKlYmG
DOI :
https://doi.org/10.5281/zenodo.7045300
Abstract :
The purpose of the study was to establish the
effect of supervisory review on financial performance of
commercial banks in Kenya. The study was founded on
asymmetry information theory. Positivism research
philosophy and casual research design were employed. The
target population comprised of forty-three commercial
banks from which a sample of thirty-eight commercial
banks was selected using purposive sampling technique.
Commercial banks which were actively operating and not
under statutory management during the period of study
were selected. Data for the period between 2013-2020 was
extracted from the bank supervision annual reports and
individual bank’s published annual reports using document
review guide. Data analysis involved descriptive statistics
and inferential analysis. The study conducted panel unit
root test, multicollinearity test, normality test,
heteroscedasticity test and autocorrelation test to avoid
spurious results. The 5% significance level was used to test
the research hypothesis. The panel regression findings
showed that supervisory review had a positive significant
effect on financial performance of commercial banks in
Kenya. The conclusion of the study was that supervisory
review explains the variation in financial performance of
commercial banks in Kenya. Further, increase in
supervisory review enhances financial performance. The
study thus, recommends that commercial banks in Kenya
should adhere to the prudential guidelines on supervisory
review so as to enhance financial performance in the long
run
Keywords :
Supervisory Review, Financial Performance, Commercial Banks
The purpose of the study was to establish the
effect of supervisory review on financial performance of
commercial banks in Kenya. The study was founded on
asymmetry information theory. Positivism research
philosophy and casual research design were employed. The
target population comprised of forty-three commercial
banks from which a sample of thirty-eight commercial
banks was selected using purposive sampling technique.
Commercial banks which were actively operating and not
under statutory management during the period of study
were selected. Data for the period between 2013-2020 was
extracted from the bank supervision annual reports and
individual bank’s published annual reports using document
review guide. Data analysis involved descriptive statistics
and inferential analysis. The study conducted panel unit
root test, multicollinearity test, normality test,
heteroscedasticity test and autocorrelation test to avoid
spurious results. The 5% significance level was used to test
the research hypothesis. The panel regression findings
showed that supervisory review had a positive significant
effect on financial performance of commercial banks in
Kenya. The conclusion of the study was that supervisory
review explains the variation in financial performance of
commercial banks in Kenya. Further, increase in
supervisory review enhances financial performance. The
study thus, recommends that commercial banks in Kenya
should adhere to the prudential guidelines on supervisory
review so as to enhance financial performance in the long
run
Keywords :
Supervisory Review, Financial Performance, Commercial Banks
