Abstract: The banking industry is vital in respect to the financial allocation through its intermediation functions of funds transfer to deficit units from surplus units. To ensure the sustenance of these functions, good performance needs to be maintained which ultimately guarantee the survival of banks. This investigation aimed at ascertaining the influence of macroeconomic factors on financial performance of listed commercial banks at the NSE, Kenya. Research population comprised of the 11 listed banks at the NSE, Kenya. The findings of the study indicated that inflation has a positive and insignificant effect of inflation on financial performance of listed commercial banks at the NSE, Kenya. The study further found that exchange rate has a negative and significant effect on financial performance of listed commercial banks at the NSE, Kenya. Lastly, the regression output indicated a positive and insignificant effect of interest rate on financial performance of listed commercial banks at the NSE, Kenya. The study recommends that bank management should come up with policies or strategies regarding cross border transactions that will cushion the negative effect of exchange rate fluctuations on financial performance of listed commercial banks at the NSE, Kenya.
Keywords: Interest rates, Exchange rates, Inflation and Financial Performance.
Title: MACROECONOMIC FACTORS AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS LISTED AT THE NAIROBI SECURITIES EXCHANGE, KENYA
Author: KENNEDY MUTUNGA MWELU, GERALD ATHERU
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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