Cost Reduction Strategies and Performance of Commercial Banks in Kenya
DOI:
https://doi.org/10.47672/jsm.1048Keywords:
cost reduction strategies, performance, commercial bankAbstract
Purpose: The purpose of the study was to establish the influence of cost reduction strategies on performance of commercial banks.
Methodology: The study used census approach and targeted all the 41 commercial banks in Kenya. This is because the population is small. Senior finance and operations managers working in the headquarters of the commercial banks were targeted. This was therefore a total of 82 respondents. The research adopted cross-sectional survey. The study used both primary and secondary data. Primary data was collected using questionnaires while Secondary information was acquired from the commercial banks' audited financial statements.
Findings: Both primary and secondary data regression results showed that cost reduction strategies had a positive and significant effect on performance of commercial banks. From the study findings, the study concluded that that cost reduction strategies had a positive and significant effect on performance of commercial banks in Kenya.
Recommendation: The study recommended that bank management should establish measures that reduce overhead costs as well as operational costs so as they can boost their performance.
Downloads
References
Adeniyi, S. I., & Egbunike, P. A. (2017). Cost reduction strategy and firm profitability during recession period: The Nigerian Banking Industry Experience. Acta Universitatis Danubius. Economica, 13(6).
Canadian Banks (2016). A new normal Perspective on the banking industry in Canada. Price Water House Coopers
Dal Colle, A. (2018). The mechanics of commercial banking liberalization and growth. Journal of Banking & Finance, 86, 194-203.
Hamed, W., Bowra, A., Aleem, M., & Hussain, A. (2016). An empirical investigation of downsizing: A study of banking sector of Pakistan. African Journal of Business Management, 7(17), 1640-1647.
Kim, C., & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make the competition irrelevant. Boston: Harvard Business School Press.
Kinyugo, M. (2014). The effect of cost efficiency on financial performance of companies listed on NSE. Unpublished Thesis, University of Nairobi.
Kumar, P., Kalwani, U., & Dada, M. (2017). The impact of waiting time guarantees on firm performance Marketing science, 16(4), 295-314.
Menon, S. 2015. Saas enter the blue ocean. Siliconindia, 11, 34-38.
Miano, M. (2013). Determinants of implementation of blue ocean strategy in commercial banks in Kenya. Unpublished MBA Thesis.
Ngumi, M. (2014). Effect of bank innovations on financial performance of commercial banks in Kenya. Doctoral dissertation.
Oloko, M. (2012). Influence of relationship marketing on Performance of commercial banks in Kenya. Education Research Journal, 2(2), 37-42.
Pooja, M., & Balwinder, S. (2009). The impact of internet banking on bank performance and risk: Th e Indian experience. Eurasian Journal of Business and Economics, 2 (4), 43-62.
Sia, K., Soh, C., & Weill, P. (2016). How DBS Bank Pursued a Digital Business Strategy. MIS Quarterly Executive, 15(2).
Siyanbola, T., & Raji, M. (2016). The impact of cost control on manufacturing industries profitability. International Journal of Management and Social Sciences, 2(34), 1-7.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Abubaker Ramathan Mukira, Dr. Paul Kariuki, Prof Willy Muturi
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work’s authorship and initial publication in this journal.
