Cost Reduction Strategies and Performance of Commercial Banks in Kenya

Abstract

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.