DETERMINANTS OF FINANCIAL STABILITY OF LISTED COMMERCIAL BANKS IN KENYA

Abstract

The main objective of this study was to establish the determinants of financial stability of listed commercial banks in Kenya. This study adopted a descriptive Survey research design. The study targeted 356 employees of commercial banks under study which included both permanent and pensionable staff and employees on contract. There were 11 listed commercial banks in Kenya as at June 2016 (CBK, 2016). Data was collected from Primary sources (primary data) by the administration of questionnaires to the target population. Data was analyzed by use of Statistical Package for Social Science version 18. It was concluded that there was significant positive influence of interest rate on financial stability of listed commercial banks in Kenya. It was also found that there was significant negative influence of operational cost on financial stability of listed commercial banks in Kenya. There was significant positive influence of bank size on financial stability of list commercial banks. It was also concluded that there was significant positive influence of liquidity on financial stability of listed commercial banks in Kenya. The study therefore recommended that commercial banks should be cross-checking liquidity ratios and liquidity flows which could prove to be useful in designing a robust prudential approach to liquidity which would results to financial stability