Tag Archives: Banks’

The Effect of Relationship Quality on Customer Loyalty: Evidence from Selected Banks in Kenya (Published)

One of the key marketing strategies implored by Banks is to create emotional connectivity with its customers and ultimately build a strong base of loyal clients. Loyalty will enable the banks to woo new customers through referrals whilst retaining existing ones and thus maintain a huge customer base. The banking industry in Kenya has undergone a revolution such that most bank customers are multi banked and therefore, majority of them may not have allegiance to specific banks. Available literature indicates that relationship quality has a direct effect on customer loyalty. In light of this fact, this paper examines the effect of relationship quality on customer loyalty based on a study of selected banks in Kenya. The main objective of the research was to develop and test a model that examines effect of relationship quality on customer loyalty. The study adapted a positivist approach because of the use of quantitative data. The study further utilized explanatory research design. A questionnaire was used to collect data from a sample of 309 bank customers in Nairobi, Mombasa, Nakuru, Kisumu and Eldoret who maintained bank accounts in the Kenya Commercial Bank, Cooperative Bank, NIC Bank, Diamond Trust Bank, African Banking Corporation and K-Rep (renamed Sidian) Bank. Correlation analysis was used to establish the relationship among the variables. Multiple and moderated regression analysis was used to test the hypotheses at α=.05 level of significance. Model effect size was measured using R-square. The results indicated that relationship quality and the dimensions in the study that is, commitment, communication and conflict handling, were significant in affecting customer loyalty, this is consistent with previous studies. Based on the findings it is imperative for the Banking industry to offer more personalised service, be more innovative, enhance the aspect of CRM (Customer Relationship Management) and embrace technology more at all service points as a tool to understand their customer’s holistically and provide timely information on the touch of a button. The study contributes to knowledge and theory through additional research in the field of relationship quality and customer loyalty.

Keywords: Banks’, Customer loyalty, Kenya, Relationship quality

Corporate Governance and Return on Assets of Quoted Banks in Nigeria (Published)

This study examined the influence of corporate governance on return on assets of quoted banks in Nigeria. The study used secondary data from 2013 to 2017.Data sourced from selected Annual Report and Accounts of three Quoted banks by the Nigerian Stock Exchange. The study utilised both Descriptive Statistics and Ordinary Least Square-Multiple Regression method with the aid of using E-view 9 to analyse the data. The results shown that, the corporate governance has significant influence on return on assets as (F-statistics = 23.46, P <0.05). The results further indicate that, the proportion of shareholders more than 10,001 share, board of composition size and bank size exerts a positive and considerable relevance to return on assets of quoted banks in Nigeria and bank size has significant influenced on return on assets with (β=2.09, t=3.94, p<0.05). Findings suggest that board of directors size of quoted banks in Nigeria should not be too large and must be meeting regularly to effectively and efficiently carry out their oversight functions and responsibilities

Keywords: Banks’, Corporate Governance, Multiple Regressions, Nigeria, Return on Assets

Corporate Board Size, Risk Management and Financial Performance of Listed Deposit Money Banks in Nigeria (Published)

This study examined the effect of corporate board size, risk management on financial performance of listed deposit money banks in Nigeria for the period of 2011-2016. The population of the study is fifteen (15) listed deposit money banks in Nigeria out of which a sample of fourteen (14) were used for the study due to the accessibility and availability of data. Corporate board size and risk management as the independent variable was proxy with numbers of board of directors, liquidity risk, credit risk and operating risk, while the return on equity(ROE)  and earnings per share (EPS) were used to proxy financial performance. Data were collected from secondary source through the annual report and account of the banks for the period under study and the data was analysed using multiple panel regression techniques. The findings reveal that board size, credit risk and operating risk are significant negative effect on return on equity (ROE) and earnings per share (EPS) respectively. The study also shows that liquidity risk is negative and insignificant effect on ROE and EPS of the study banks in Nigeria. It is recommended among others that the banks should regulate their risk management practices and ensure they minimize the non-performing loan as it has been found empirically to reduce the quality of the firm’s financial performance. They should also reduce their operational cost for better performance

Keywords: Banks’, Corporate board size, Financial Performance, Nigeria, Risk Management

Business Consolidation and Its Impact on Financial Performance: Evidence from the Ghanaian Banking Industry (Published)

The study provides empirical examination on the impact of business consolidation or mergers and acquisitions (M&A) on the financial performance of banks in Ghana. Both descriptive and correlational research designs were employed for the study. Two banks: Ecobank Ghana Ltd and Access Bank Ghana Ltd were chosen for the study. The annual reports of the banks from pre-merger period (2009 to 2011) and post-merger period (2012 to 2015) were used for the analysis. Two analysis techniques: ratio and regression analysis were used to examine the impact of mergers and acquisitions (M&A) on the profitability of these firms. Net profit margin (NPM) and return on capital employed (ROCE) were used as proxies for financial performance and Ordinary Least Square (OLS) regression model was used to estimate the level of impact of M&A on the performance of the banks. The study revealed that mergers and acquisitions (M&A) resulted to more than 80% growth in income and the net assets immediately after acquisition. The growth in profitability continued in subsequent years, however at a decreasing rates. With regards to net profit margin and return on capital employed (ROCE), the banks observed a marginal decline after three years of acquisition. The study further found empirical evidence to support the view that mergers and acquisitions (M&A) has a positive and significant impact on both NPM and ROCE. Accordingly, it is concluded that mergers and acquisitions (M&A) has a positive and significant impact on financial performance of banks.

Keywords: Acquisition, Agency Theory, Banks’, Consolidation, Mergers, Net Profit Margin, Return on Capital Employed (ROCE), synergy

The Effect of Human Capital Development on Financial Performance of Banks in Nigeria (Published)

The study examined the effect of human capital development on financial performance of banks in Nigeria.  The specific objective was to determine the extent to which the banks PDW affects the PAT, TR and the NA. The research design employed was a cross sectional survey design.  Time series data which comprise PDW, PAT, TR, and NA of quoted commercial banks in the NSE were the secondary data used.  Statistical tools of Multiple Linear Regression and student t-test were used for the analysis. The regression model was estimated through the use of statistical package for social sciences (SPSS).  The three null hypotheses used in this study were tested at 5% level of significance.  The result obtained showed a no effect on PAT and no effect on TR, but a negative effect on NA. The p-value for all the independent variables are not significant.  The F-test showed a good fit for the model. The study therefore concludes that banks have not invested adequately on human capital development that is why the effect on financial performance is not significant.  Therefore commercial banks in Nigeria are advised to give more attention to human capital development by way of training and adequate welfare to enhance their productivity.

Keywords: Banks’, Human Capital Development, financial performance and Nigeria, net asset, total revenue

Customer Relationship Management and Profitability of Money Deposit Banks In Nigeria (2006 – 2015) (Published)

The study investigated the customer relationship management and profitability of money deposit banks in Nigeria from 2006 to 2015.  Ten banks out of twenty one functioning banks were selected for the study.  The specific objective was to ascertain the extent to which bank CRP affect the TR and PAT. Secondary data employed were from the annual reports from banks published in the NSE website.  Multiple regression analysis and student t-test were the statistical tools employed, with the use of SPSS for both data analysis and to test the hypotheses formulated for the study at 5% level of significance.  The result indicated that CRP has a significant relationship with the total revenue of banks with little or no impact. Since the impact on TR is not much, its relationship with PAT is not significant while the impact is negative.  The study therefore concludes that if banks can give more attention to customer relationship management, the revenue base (income from customers) will have a boost and operating overhead will not absorb all the income. As a result, there will be enough retained profit to pool back (reinvest) into the business.  

Keywords: Banks’, Customer Relationship Management, Nigeria, Profit after tax, total revenue

Effect of Credit Management on Performance of Commercial Banks in Rwanda (A Case Study of Equity Bank Rwanda Ltd) (Published)

Credit management is one of the most important activities in any company and cannot be overlooked by any economic enterprise engaged in credit irrespective of its business nature.  Sound credit management is a prerequisite for a financial institution’s stability and continuing profitability, while deteriorating credit quality is the most frequent cause of poor financial performance and condition. As with any financial institution, the biggest risk in bank is lending money and not getting it back. The study sought to determine the effect of credit management on the financial performance of commercial banks in Rwanda. The study adopted a descriptive survey design. The target population of study consisted of 57 employees of Equity bank in credit department. Entire population was used as the sample giving a sample size of size of 57 employees. Purposive sampling technique was used in sampling where the entire population was included in the study. Primary data was collected using questionnaires which were administered to the respondents by the researcher. Descriptive and inferential statistics were used to analyze data. The study found that client appraisal, credit risk control and collection policy had effect on financial performance of Equity bank. The study established that there was strong relationship between financial performance of Equity bank and client appraisal, credit risk control and collection policy. The study established that client appraisal, credit risk control and collection policy significantly influence financial performance of Equity bank. Collection policy was found to have a higher effect on financial performance and that a stringent policy is more effective in debt recovery than a lenient policy. The study recommends that Equity bank should enhance their collection policy by adapting a more stringent policy to a lenient policy for effective debt recovery.

Keywords: Banks’, Client Appraisal, Credit Management, Debt Recovery, Financial Performance, Lending, Money, Risk Control

The Effects of Key Service Outsourcing Strategies on Organizational Performance. (A Case Study of Commercial Banks in Ghana) (Published)

The study utilized registration inspecting to gather information from every one of the 15 acquisition officer, 17 examiners and 386 bolster staff. Cronbach alpha coefficient was utilized to test unwavering quality and was dissected utilizing descriptive insights and inferential measurements. The discoveries demonstrated that outsourcing absolutely increases on the execution of associations, it diminishes expenses of operation, efficient, nature of administration lastly the influences emphatically business deftness operation. Hence, the rate of hierarchical execution as a consequence of outsourcing is high in both short and long haul and numerous business administrators are resolved to join their prosperity to the outsourcing process. The study suggests that Policy creators and the administration need to comprehend the difficulties confronted in outsourcing administrations and figure approaches that would enhance administration conveyance. The study additionally shape a premise for further research by researchers intrigued to investigate how outsourcing influence execution at business banks in Ghana.

Keywords: Banks’, Business Deftness, Ghana, Organizational Performance, Outsourcing

Electronic Knowledge of Customers and Employees of Jordanian Banks and Its Impact on the Quality of Banking Service: Banks of Jerash City-A Case Study (Published)

This study aims to highlight the impact of electronic knowledge in the customers of Jordanian banks on the quality of banking services, accuracy, speed of achievement and the extent of their contribution to improve banking services among workers in these banks. To achieve the objectives of the study, a questionnaire was developed and distributed to the study sample which consists of (161) employees working in Jerash banks, and this sample is the total community of the study; the census method was used to represent the community properly. Moreover, the sample was intentionally selected from seven private banks in this city, and data and information were collected by making interviews, and a questionnaire distributed to achieve the objectives of this study. The study achieved its objectives through hypotheses that were tested by several statistical methods, and to know its moral significance, as well as to reach the most important field results that represent the contribution that came out of this study. The study concludes the following: There is an interest in the subject of electronic knowledge in terms of concepts, elements, and advantages through accumulation of knowledge in the Arab administrative library. There is no clear agreement about the rankings (elements) of electronicor electronic knowledge. The level of using the electronicknowledge in the customers of banks is low. The level of relative importance of sub-variants of the dependent variable was high (quality of banking service) There is a significant moral correlation between sub-variables of the independent variable (electronicknowledge) and quality of banking services. There are few studies that joined electronicknowledge with quality banking service. Most of the study’s hypotheses were achieved. The study concluded some important recommendations, including: Promote awareness among customers about the electronic field and increase conviction of the importance of electronicknowledge in terms of saving time, fast achievement, reduce costs and accuracy of work. Facilitating procedures and various means of technology and software for the banks in order to ensure that electronic uses to keep up with global banks that deal and compete with them. Applying quality standards in the banks, and focus on the use of information technology in all branches and divisions.

Keywords: (IT), Banks’, Electronic Knowledge, Knowledge, Sector of Electronic Banking Service.

Dividend Payout Pattern: Nigeria Deposit Money Banks in Perspective (Published)

Investors invest their money with the hope to have returns that could improve their welfare in future. Dividend is one of those expectations that investors hope to get as a result of their investment. A Company pays dividend in order to encourage further investment for growth. However, the degree and extent by which dividend is made depend on the organization management decision. There has been contradicting arguments on firms dividend payout ratio such as rightist, leftist and the middle of the road hypothesis on whether firms should pay dividend or not. Hence there has not been any conclusive study on the factors that determine the dividend growth pattern of Deposit Money Banks in Nigeria. It is this perceived gap that informs the empirical analysis of growth pattern of dividend payout of quoted banks in Nigeria. The study relies majorly on secondary data sourced from the financial report of seven (7) quoted banks in the Nigeria Stock Exchange. It was found that all the explanatory variables (inflation, share price and earnings per share) have significant impact on dividend payout. The study recommends that deposit money banks in Nigeria should improve on their performance so as to increase earnings which will go a long way in determining the Dividend Payout Pattern of their banks while government should makes both investment and production environment suitable for banks to produce locally and avoid much importation to control inflation.

Keywords: Banks’, Dividend Payout Pattern, Inflation, Investment, Nigeria

DOES EARNING PER SHARE DETERMINE MARKET PRICE OF ORDINARY SHARES? EVIDENCE FROM NIGERIA BANKING SECTOR (2000 – 2013) (Published)

The study aims at examining the magnitude and nature of the relationship between earnings per share and market price of ordinary shares in Nigeria banking industry from 2004 to 2013. In addition, it aims at ascertaining the impact of earnings per share on prices of ordinary shares in Nigerian banking industry. Ordinary least squares method in the form of multiple regression was applied in the analysis. Stationarity test was conducted using the Augmented Dickey- Fuller (ADF) and Phillip Perrons (PP) tests. The result reveals that earnings per share significantly and positively influence the market price of ordinary shares; with a strong and positive association too. Earnings per share also granger causes market price of ordinary shares and these characteristics are sustainable in the long run in Nigerian banking sector. The implication of the findings is that an increase in earnings has the tendency of increasing significantly the market price of shares and earnings per share is one of the key factors responsible for fluctuations in market price of ordinary shares in Nigerian banking sector. Therefore, it is pertinent for banks targeting the enhancement of their equity price to adopt workable strategies towards attracting more deposit, increasing their lending, reducing their expenditure profile and opening up other investment avenues to improve upon their earnings.

Keywords: Banks’, Earnings, Granger, Nigeria, Regression, Shares

DOES EARNING PER SHARE DETERMINE MARKET PRICE OF ORDINARY SHARES? EVIDENCE FROM NIGERIA BANKING SECTOR (2000 – 2013). (Published)

The study aims at examining the magnitude and nature of the relationship between earnings per share and market price of ordinary shares in Nigeria banking industry from 2004 to 2013. In addition, it aims at ascertaining the impact of earnings per share on prices of ordinary shares in Nigerian banking industry. Ordinary least squares method in the form of multiple regression was applied in the analysis. Stationarity test was conducted using the Augmented Dickey- Fuller (ADF) and Phillip Perrons (PP) tests. The result reveals that earnings per share significantly and positively influence the market price of ordinary shares; with a strong and positive association too. Earnings per share also granger causes market price of ordinary shares and these characteristics are sustainable in the long run in Nigerian banking sector. The implication of the findings is that an increase in earnings has the tendency of increasing significantly the market price of shares and earnings per share is one of the key factors responsible for fluctuations in market price of ordinary shares in Nigerian banking sector. Therefore, it is pertinent for banks targeting the enhancement of their equity price to adopt workable strategies towards attracting more deposit, increasing their lending, reducing their expenditure profile and opening up other investment avenues to improve upon their earnings.

Keywords: Banks’, Earnings, Granger, Nigeria, Regression, Shares

THE EFFECT OF EMOTIONAL INTELLIGENCE ON THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN GHANA: THE MEDIATION ROLE OF RELATIONSHIP MARKETING, SERVICE QUALITY, CUSTOMER SATISFACTION (Published)

This study examines the effect of emotional intelligence on financial performance of commercial banks in Ghana from the perspective of the mediation role of relationship marketing, service quality and customer satisfaction. It goes further to indicate the relative impacts of these mediating variables on financial performance. A complete picture of the monetary effects of investing in the enhancement of employees’ emotional intelligence is hence the core of this paper. The study is a descriptive quantitative study in which a sample of 220 each of service providers and customers in 20 commercial banks in Ghana are used. Pearson’s correlation test, partial correlation test and ordinary least squares regression analysis were used to analyse data. According to findings, emotional intelligence positively relates to relationship marketing (r = .804, p = .000), service quality (r = .601, p = .000), customer satisfaction (r = .426, p = .000) and financial performance (r = .734, p = .000). Emotional intelligence also significantly predicts relationship marketing, service quality, customer satisfaction and financial performance by contributing 64.7%, 63.2%, 23.2% and 32% of the variance respectively. It is made evident that relationship marketing provides the most dominant mediation in the relationship between emotional intelligence and financial performance in the face of service quality and customer satisfaction. Commercial banks are therefore encouraged to deploy resources towards equipping their service providers with emotional intelligence

Keywords: Banks’, Customer Satisfaction, Emotional Intelligence, Financial Performance, Relationship Marketing, Service Quality, service providers

THE ERA OF POST-CONSOLIDATION AND BANKS’ PROFITABILITY IN NIGERIA (2000- 2013): A MULTIVARIATE CO-INTEGRATION ANALYSIS (Review Completed - Accepted)

The paper examined the relationship between the era of post-consolidation and banks’ profitability in Nigeria using data spanning (2000-2013). Secondary data was collected from the CBN statistical and economic and financial review bulletins. Hypotheses were formulated and tested using error correction model (ECM) and the study reveals that the variables are stationary and integrated of order at various levels. There is also long-run equilibrium relationship between the era of post-consolidation and banks’ profitability in Nigeria and the result confirms that about 62% short-run adjustment speed from long-run disequilibrium. The coefficient of determination indicates that about 27% of the variations in banks’ profitability are explained by changes in the era of post-consolidation variables. The study therefore recommends that bank management should strengthen their supervising units in credit administration to avoid the issue of non-performing load. For Nigeria banks to be a major player in domestic and international market, banks capital should be above minimum regulatory requirements at all times. Shareholders’ funds and total assets of banks should be periodically evaluated and aggregate marketing should be vigorously intensified by the banks

Keywords: Banks’, Era, Nigeria, Post-Consolidation, Profitability