scholarly journals MEASURES COMMERCIAL BANKS HAVE TAKEN TO ENSURE COMPLIANCE WITH THE CAPITAL ADEQUACY REQUIREMENT IN BASEL III FRAMEWORK

2017 ◽  
Vol 1 (4) ◽  
pp. 64
Author(s):  
Kevin N. Kombo ◽  
Dr. Amos Njuguna
Keyword(s):  
Commercial Banks ◽  
Survey Design ◽  
Descriptive Analysis ◽  
Target Population ◽  
Capital Adequacy ◽  
Primary Data ◽  
Basel Iii ◽  
Entry Level ◽  
Revenue Growth ◽  
Management Staff

Purpose: The purpose of the study was to establish measures commercial banks have taken to ensure compliance with the capital adequacy requirement in Basel III framework.Methodology: A descriptive survey design was applied to a population of 43 commercial banks operating in Kenya. The target population composed of the 159 management staff currently employed at the head offices of the various commercial banks in Kenya. The population was composed of Senior, Middle and Junior or Entry level Management staff. A sample of 30% was selected from within each group. Primary data was gathered using questionnaires which were dropped off at the bank’s head offices and picked up later when the respondents had filled the questionnaires. Descriptive analysis was used to analyze quantitative data while content analysis was used to analyze qualitative data.Results: Based on the findings the study concluded that the commercial banks in Kenya have taken various measures to ensure compliance with capital adequacy requirement such as cutting back on lending, market rights issue/bonds, increasing revenue growth/cutting costs and withholding dividend payment. In addition, the study concluded that commercial banks, in a bid to reduce the challenges experienced in the implementation of capital adequacy requirement, they opt to purchase high quality liquid assets, increasing their maturity profile and increasing retail deposits.Unique contribution to theory, practice and policy: The study recommends that it is vital to understand the forces behind the increasing sophistication and efficiency of risk management systems, before adopting them more widely for regulatory purposes

scholarly journals CHALLENGES FACING COMMERCIAL BANKS IN THE IMPLEMENTATION OF CAPITAL ADEQUACY REQUIREMENT IN BASEL III FRAMEWORK

2017 ◽  
Vol 1 (4) ◽  
pp. 45
Author(s):  
Kevin N. Kombo ◽  
Dr. Amos Njuguna
Keyword(s):  
Commercial Banks ◽  
Survey Design ◽  
Descriptive Analysis ◽  
Capital Adequacy ◽  
Primary Data ◽  
Basel Iii ◽  
Management Culture ◽  
Finance Management ◽  
Regulatory Constraints ◽  
Management Staff

Purpose: The purpose of the study was to identify challenges facing commercial banks in the implementation of capital adequacy requirement in Basel III framework.Methodology: A descriptive survey design was applied to a population of 43 commercial banks operating in Kenya. The target population composed of the 159 management staff currently employed at the head offices of the various commercial banks in Kenya. The population was composed of Senior, Middle and Junior or Entry level Management staff. A sample of 30% was selected from within each group. Primary data was gathered using questionnaires which were dropped off at the bank’s head offices and picked up later when the respondents had filled the questionnaires. Descriptive analysis was used to analyze quantitative data while content analysis was used to analyze qualitative data.Results: The study concludes that the implementation of Basel III requirement has been faced by various challenges like growth barrier, regulatory constraints, risk and finance management culture and additional capital challenges. In addition, the study concluded that commercial banks face challenges in deciding how best to implement a solution that will allow them to comply with Basel III, how to operate the systems and processes for improved operational effectiveness, and how to understand and ultimately reduce their capital requirements.Unique contribution to theory, practice and policy: The study recommends that Banks should manage their risks more closely and avoid a build-up of unintended risk, reducing the opportunities for regulatory capital arbitrage. This would go a long way in eliminating growth barriers, regulatory constraints, capital adequacy requirement, risk and finance management culture and additional capital challenges.

scholarly journals IMPORTANCE OF CAPITAL ADEQUACY REQUIREMENTS IN BASEL III FRAMEWORK FOR COMMERCIAL BANKS IN KENYA

2017 ◽  
Vol 1 (4) ◽  
pp. 26 ◽  
Author(s):  
Kevin N. Kombo ◽  
Dr. Amos Njuguna
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Financial Stability ◽  
Balance Sheet ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Primary Data ◽  
Basel Iii ◽  
Management Staff ◽  
Speed Accuracy

Purpose: The purpose of the study was to examine the importance of capital adequacy requirements in Basel III framework for commercial banks in KenyaMethodology: A descriptive survey design was applied to a population of 43 commercial banks operating in Kenya. The target population composed of the 159 management staff currently employed at the head offices of the various commercial banks in Kenya. The population was composed of Senior, Middle and Junior or Entry level Management staff. A sample of 30% was selected from within each group. Primary data was gathered using questionnaires which were dropped off at the bank’s head offices and picked up later when the respondents had filled the questionnaires.Descriptive analysis was used to analyze quantitative data while content analysis was used to analyse qualitative data.Results: The study concludes that capital adequacy requirement is perceived to be important in commercial banks. The study thus deduces that financial stability, credit risk management, reduced vulnerability to liquidity shocks balance sheet structure and deposit insurance affect the capital requirement of the commercial banks in Kenya. In addition, the study concluded that Basel III increases capital requirements for counterparty credit risk arising from derivatives, repurchase agreements and securities financing activities.Unique contribution to theory, practice and policy: The study recommends that banks should ensure a flexible Basel III management expertise that delivers speed, accuracy, and performance to deliver competitive advantage.

scholarly journals Effects of Basel III Framework on Capital Adequacy of Commercial Banks in Kenya

2016 ◽  
Vol 1 (1) ◽  
pp. 61
Author(s):  
Kevin Kombo ◽  
Dr. Amos Njuguna
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Financial Stability ◽  
Safety Net ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Basel Iii ◽  
Credit Risk Management ◽  
Management Staff

Purpose:The purpose of the study was toassess the effects of Basel III framework on capital adequacy requirement in commercial banks in Kenya. The study sought to address the following research questions: why are capital adequacy regulations important in commercial banks in Kenya? What challenges are commercial banks facing in the implementation of capital adequacy requirement? What measures have commercial banks taken to ensure compliance with the capital adequacy requirement?Methodology:A descriptive survey design was applied to a population of 43 commercial banks operating in Kenya. The target population composed of the 159 management staff currently employed at the head offices of the various commercial banks in Kenya. The population was composed of Senior, Middle and Junior or Entry level Management staff. A sample of 30% was selected from within each group.Primary data was gathered using questionnaires which were dropped off at the bank’s head offices and picked up later when the respondents had filled the questionnaires. Descriptive analysis was used to analyze quantitative data while content analysis was used to analyze qualitative data.Results:The findings show that capital adequacy requirement is important in commercial banks because it leads financial stability in the Kenyan economy, improves credit risk management techniques as poor credit risk management requires more capital and leads to reduced vulnerability to liquidity shocks due to the sound capitalization policies being implemented under the Basel III framework. Findings also revealed that capital adequacy affected the balance sheet structure of the commercial banks in Kenya.Unique contribution to theory, practice and policy: The study recommends that banks should continue the pursuit of various strategies to ensure that they are in compliance with Basel III requirements and the Central Bank of Kenya’s Prudential Guidelines. The staff of this committee should be drawn from mainly the finance, legal, compliance and treasury departments. Compliance with the capital requirements will lead to a safety net for all commercial banks as the additional capital will act as a cushion that absorbs losses in case of distress in the commercial banking sector.

scholarly journals Adoption of Digital Banking Technology and Financial Performance of Commercial Banks in Kenya

2020 ◽  
Vol 2 (1) ◽  
pp. 42-50
Author(s):  
Stephen Otieno Ouma ◽  
Fredrick W.S Ndede
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Positive Impact ◽  
Survey Design ◽  
Diffusion Theory ◽  
Target Population ◽  
Turnaround Time ◽  
Positive Influence ◽  
Primary Data ◽  
Technology Innovations

Commercial banks play a leading role in the economic development of a country and this role of can be achieved only if the banks are stable. Digital banking technology has thus emerged as a way through which the commercial banks can be able to improve their financial performance by enhancing retail and corporate banking activities. From the inception of digital banking, banks have improved their networks in areas of deposits, withdrawals and other banking activities. However, despite the innovative ideas in digital banking, there still exists gaps as some banks still fail and face imminent collapse. The objective of this study was to establish how digital banking technology innovations affects the financial performance of commercial banks. The study took a descriptive survey design and was driven by three objectives namely; determining the effect of access to digital banking technology, turnaround time and digital banking technology costs on financial performance. This study was anchored on financial intermediation theory, innovation diffusion theory and modern economics theory. A questionnaire was used to collect primary data over a target population of 42 commercial banks in Kenya. The study involved a census of the commercial banks in Kenya as at September 2018 and encompassed collection of data through self-administered questionnaires targeting the finance and IT managers of the banks in their headquarters in Nairobi. The data collected was analysed using a descriptive method. The responses were tabulated, coded and processed by use of a computer statistical package for social scientists. The findings of the study were analysed and presented using statistical methods including pie charts and bar graphs and frequency tables. From the findings and summary, the study concluded that the ease of access to digital banking through digital-banking technology innovations had a positive influence on the financial performance of commercial banks in Kenya. The study also concludes that the turnaround time of digital banking technology innovations had a positive impact on the financial performance of commercial banks in Kenya with many of the banking institutions recording high amount of deposits and improved loan values thus creating an opportunity of increasing their customer base.

scholarly journals A Study on Financial Performance of the Jordanian Commercial Banks using the CAMEL Model and Panel Data Approach

2020 ◽  
Vol 9 (4) ◽  
pp. 111-130
Author(s):  
Jamil Al Zaidanin
Keyword(s):  
Commercial Banks ◽  
Negative Relationship ◽  
Capital Adequacy ◽  
Primary Data ◽  
Quality Level ◽  
Financial Reports ◽  
Interest Income ◽  
Lending Policy ◽  
Performance Determinants ◽  
Asset Quality

The purpose of this research paper is to extensively investigate and examine the effect of the CAMEL model variables on the profitability and financial soundness of the thirteen Jordanian commercial banks for the period of 2013 to 2019, the primary data were collected from the published audited financial reports of the Jordanian commercial banks. The study uses CAMEL model variables of Capital adequacy, Asset Quality, Management efficiency, Earnings ability, and Liquidity management to rank banks as per their overall performance and measuring their effect on banks’ profitability measures of Return on Assets and Return on Equity separately through applying the fixed effect regression model. It is concluded that the ranking approach shows that Bank of Jordan was in the top position followed by the Capital Bank of Jordan. Jordan Ahli Bank was in the lowest rank in most positions. Furthermore, the empirical results indicates that Non-Interest Income to Total Assets and Net Interest Income to Total Loans and Advances have significant positive relationships with both profitability measures whereas cost to Total Income and Non-Interest Income to Total Assets have strong negative relationships with the profitability measures. In addition, Equity to Total Assets has strong negative relationship with ROE. The study suggests that Jordanian commercial banks can improve their profitability through the concentration on main activities, efficiently managing their capital adequacy, maintaining high quality level of lending policy, and utilization of full assets. Additionally, the current study recommends conducting more studies on banks’ performance determinants with an expanded scope and using more financial models besides the CAMEL model.

Basic Requirements Of The Basel Committee On Regulating Capital Adequacy And Liquidity Of Commercial Banks

2012 ◽  
Vol 4 ◽  
Author(s):  
Bahriddin Berdiyarov
Keyword(s):  
Risk Assessment ◽  
Commercial Banks ◽  
Basel Ii ◽  
Capital Adequacy ◽  
Basel Iii ◽  
Basel Committee ◽  
Performance Quality ◽  
Regulatory Standards ◽  
Loan Risk ◽  
Credit Risk Measurement

The current paper highlights theBaselI, Basel II & Basel III requirements on capital adequacy and liquidity of commercial banks.  In the paper, Basel II structure, methods of loan risk assessment, coefficients of loan risk assessment, credit risk measurement for counterparty banks are discussed.  Moreover, assessments of Basel III on bank chances against crisis driven from financial and economic crunches, risk management, performance quality and bank transparency improvement measures are presented.  At the end, the author gives his conclusions on the essence and necessity of new regulatory standards of the Basel Committee on bank’s supervision in the structure of the supervision of credit institutions.

scholarly journals INFLUENCE OF PROJECT MANAGEMENT INFORMATION SYSTEM ON CREDIT DIGITIZATION IN COMMERCIAL BANKS IN NAIROBI, KENYA

2021 ◽  
Vol 6 (1) ◽  
pp. 12-31
Author(s):  
JEREMIAH KAMAU ◽  
Maurice Pedo
Keyword(s):  
Regression Analysis ◽  
Technology Acceptance ◽  
Commercial Banks ◽  
Survey Design ◽  
Stakeholder Management ◽  
User Involvement ◽  
Monitoring And Evaluation ◽  
Target Population ◽  
Disruptive Innovation ◽  
Unique Contribution

Purpose:  Therefore, the study sought to establish the influence of PMIS on credit digitization in commercial banks in Kenya.  Methodology: The target population for the study was the 42 commercial banks in Kenya. The study employed a descriptive survey design and was census of the 42 commercial banks head offices in Nairobi, Kenya. Data was collected by use of a structured questionnaire. The data was cleaned, coded and analyzed using a Statistical software (SPSS). The findings were presented in form of tables, charts and graphs. Descriptive statistics were deduced from the data. From this, inferential statistics were presented and associations drawn. Regression analysis was interpreted and appropriate conclusions made. Findings: The findings from regression analysis showed that expertise of the project team, end-user involvement, project risk management and project monitoring and evaluation positively and significantly influence credit digitalization in Kenyan Commercial banks.   Unique contribution to theory, practice and policy: The study was guided by the lenses of Stakeholder Management theory, Technology Acceptance Model (TAM) and the Theory of Disruptive Innovation from which the study operationalized the variables of PMIS Implementation and Credit Digitization. Banks should conduct training to all team members before commencement and during project execution. Moreover banks should involve customers in testing of projects before launching and should consider the feedback from customers

scholarly journals Implementation of Strategic Plans on Oil Distributors: A Study on Selected Oil Companies in Kenya

2016 ◽  
Vol 3 (3) ◽  
pp. 91-98
Author(s):  
Yussuf Dahir Awale ◽  
Gregory Namusonge ◽  
Kule Julius Warren
Keyword(s):  
Resource Allocation ◽  
Organizational Culture ◽  
Organizational Structure ◽  
Survey Design ◽  
Target Population ◽  
Primary Data ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Oil Companies ◽  
Strategic Plans

The essence of strategy is to attempt to relate the organization to the changes in the environment. For any organization, strategy helps in interrogating the long term plans and ensuring that there is harmony between the vision, mission, objectives, core values, activities and its environment. Strategy formulation and implementation are core management functions. The developed strategy may be good but if its implementation is poor the intended strategic objectives may not be achieved. To ensure survival and success, firms do not only need to formulate strategies that seek to constantly maintain a match between the organization and its environment but also must ensure appropriate execution of strategy at all levels. Success therefore calls for proactive approach to business. The study aimed at identifying the determinants of strategy implementation plans on oil distributors in Kenya. Specifically, the study attempted to achieve the following objectives: to determine the effect of organizational structure; organizational culture; leadership; resource allocation and to establish the effect of communication on implementation of strategic plans on oil distributors in Kenya. The study was based on resource-based theory; dynamic capability theory and knowledge-based view theory. The study adopted a survey design that had used cross-sectional survey approach to collect data. The population of the study comprised of 14 oil distributors in Kenya based in Nairobi County. The target respondents comprised of 64 business owners and 136 managers therefore comprising of a target population of 200 respondents. A sample size of 60 respondents was selected for the study. Primary data was collected through semi-structured questionnaires. Data was coded in SPSS and Excel software for analysis where the tables of frequencies, percentage, mean and standard deviation was extracted for presentation of data. Inferential statistics was done to establish the relationship between the implementation of strategic plans and the five independent variables. The outcome of the study was to establish whether organizational structure; organizational culture; leadership; resource allocation and corporate communication affect the implementation of strategic plans in the oil distributors sector in Nairobi County. The research recommends that for oil distributors to improve on the implementation of strategic plans they need to enhance of teamwork, accountability, transparency and communication.  

scholarly journals EFFECT OF RAILWAY NETWORK INEFFICIENCIES ON BUSINESS OPERATIONS OF TATA CHEMICALS MAGADI, MOMBASA IN KENYA

2016 ◽  
Vol 1 (1) ◽  
pp. 26
Author(s):  
Keponyi Sakimpa ◽  
Dr. Willy M. Muturi ◽  
Dr Mos Otieno
Keyword(s):  
Survey Design ◽  
Target Population ◽  
Primary Data ◽  
P Value ◽  
Railway Network ◽  
Business Operations ◽  
The Government ◽  
Equipment Utilization ◽  
Descriptive Survey ◽  
Managerial Employees

Purpose: The purpose of this study was to investigate the effect of railway network inefficiencies on business operations of Tata chemicals Magadi, Mombasa in Kenya.Methodology: This study adopted a descriptive survey design. The target population of this study was the 450 employees of TATA Chemical Magadi Ltd. The study used a sample of 135 employees. The study employed stratified random sampling to identify the 135 respondents. The strata were those of top management, middle management/supervisors and non-managerial employees. Primary data was used to gather information by use of questionnaires. Information was sorted, coded and input into the statistical package for social sciences (SPSS 20) for production of descriptive and inferential statistics.Results: Results on the analysis of variance showed that the overall model was statistically significant and that the independent variables were good predictors of performance.  This was supported by an F statistic of 71.69 and the reported p value (0.000) which was less than the conventional probability of 0.05significance level. Descriptive results indicated that inefficiencies of Kenya Railway Corporation greatly affect production targets, customer satisfaction, sales targets and equipment utilization in Tata chemicals Magadi Ltd which in turn affects the performance of the company.Unique contribution to theory, practice and policy: The government should allocate additional annual budget to the Kenya Railways Corporation to provide efficient means of transporting freight between cities and towns. Additionally, management of Tata Chemicals Magadi Ltd should exercise stronger leadership to enhance long term planning and disaster management to avoid loss to customers and manage its efficiency.

INFLUENCE OF SUPPLIER COMPETENCE ON THE PERFORMANCE OF STATE CORPORATIONS IN KENYA

2017 ◽  
Vol 1 (3) ◽  
pp. 97
Author(s):  
Elizabeth Wangu Wachiuri ◽  
Dr. Esther Waiganjo ◽  
Dr. Noor Ismail ◽  
Prof. Romanus Odhiambo
Keyword(s):  
Survey Design ◽  
Reliability And Validity ◽  
Target Population ◽  
Primary Data ◽  
P Value ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Significance Level ◽  
Qualitative Approaches ◽  
The One

Purpose: The purpose of this study was to determine the influence of supplier competence on the performance of state corporations in KenyaMethodology: The study adopted cross-sectional survey design using both quantitative and qualitative approaches. The target population was all the 187 state corporations in Kenya. The study employed a census approach. Primary data was collected using questionnaires. A pilot study was conducted to measure the research instruments reliability and validity. Descriptive statistics were used aided by Statistical Packages for Social Sciences version 24 to compute percentages of respondents’ answers. Inferential statistics using linear regression and correlation analysis were applied to assist examining relationship between the research variables. The results were presented using tables and graphs.Results: The findings revealed that supplier competence explained 44.1 % of the total variations in performance of state corporations in Kenya. Further, the results indicated that the overall model was statistically significant as supported by a p value of 0.000. This was supported by an F statistic of 111.904 and the reported p value (0.000) which was less than the conventional probability of 0.05 significance level. In addition, the findings show that there is a positive and significant relationship between supplier competence and performance of state corporations in Kenya as supported by a p value of 0.000 and a beta coefficient of (0.903). This implies that an increase in supplier competence by 1 unit would increase the performance of state corporations by 0.903units.Unique contribution to theory, practice and policy:  Based on the findings, the study recommended that suppliers should develop competent technical abilities so as to provide high quality products or services. Some of the technical dimensions that suppliers should develop competence in include; compliance with quantity, compliance with due date, compliance with packaging standard, production planning systems of suppliers, and maintenance activities of suppliers, plant layout and material. It’s also recommended that state corporations in Kenya should check frequently if supplier organisation is abreast with the newer information technology developments as technology is very dynamic and changes regularly as the technology that was used in the past is not the one we using now and it will not be the one we will use tomorrow.

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