INFLUENCE OF MANAGERS’ DEMOGRAPHIC INFORMATION ON THE RELATIONSHIP BETWEEN FINANCIAL DETERMINANTS INDICATORS AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA

Abstract

Despite the implementation of financial determinant indicators in commercial banks, banks still declare deficit from operational income. The purpose of this study was to examine the influence of manager’s demographic information on the relationship between financial determinant indicators and financial performance of commercial banks in Kenya. Mixed method of research design which comprised of quantitative and qualitative designs was applied in this study. Quantitative and qualitative data were collected through questionnaires. Target population was 43 licensed Commercial Banks in Kenya. Cronbach Alpha test of 0.961 was obtained indicating the reliability of the research instrument. Content and criterion validity were ensured through incorporating the experts’ suggestions in the final document. Data was analyzed using descriptive statistics and inferential statistics which included correlation analysis, bivariate regression analysis and multiple regression analysis after testing for normality, multicollinearity and performing factor analysis. The study findings established a significant relationship between financial determinant indicators and financial performance. This relationship was magnified with the influence of the moderating variable (manager’s demographic information). In the practical life this moderating relationship is vital since banks need competent (experienced and skilled) personnel to install and operationalize risk management framework, enhance product diversification, implement strategies on credit information sharing to avoid multiple loaning and non- performing loans and facilitate adoption of collateral security that encourage earlier repayment of credit facility and avoid recoveries