Ownership structure and financial performance: Evidence from Kenyan commercial banks

Abstract

The study examined the relationship between ownership structure and financial performance of commercial banks in Kenya for the period 2009–2020. The data were collected from audited financial statements of 39 commercial banks in Kenya. Regression results found strong evidence on ownership structures in explaining the differences in commercial banks’ financial performance. The results established that the greatest influence of ownership structures was on net interest margin at 53.04% and return on assets at 31.37%. Influence of ownership structures was found to be low on return on equity at 3.32% and earnings per share at 2.13%. The results found a negative association between state ownership and net interest margin, negative association between management ownership and both net interest margin and earnings per share, negative association between institutional ownership and return on assets and a negative association between foreign ownership and earnings per share. Based on the findings, commercial banks should vary their ownership structures to boost financial performance. Secondly, banks with high percentage of state ownership should consider partial privatization to improve corporate governance practices. Third, banks should adopt managerial ownership policy limiting the proportion of equity stock on executives to limit their powers in strategic decision making. Fourth, the study proposes a percentage limit on equity stock of an individual institutional investor. Lastly, the study proposes that bank’s management to come up with a policy detailing the role and place of foreign investors in strategic decision making to ensure their presence in every decision undertaken by bank managers.

The Effect of Corporate Social Responsibility and Ownership Structure on Financial Performance of Consumer Non Cyclicals Companies in Indonesian

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Faktor-Faktor Yang Mempengaruhi Manajemen Laba Perusahaan Manufaktur

“…Kepemilikan manajerial adalah proporsi saham yang dimiliki anggota eksekutif perusahaan (Kirimi et al, 2022). Konflik antara agen dengan prinsipal timbul karena pemisahan kepentingan, tingginya saham manajemen akan memotivasi manajer untuk melakukan manajemen laba untuk mendapatkan keuntungan maksimal dari saham perusahaan (Suheny, 2019).…”

“…Suaidah & Utomo (2018) menyatakan bahwa profitabilitas yang tinggi akan memunculkan tindakan manajemen untuk melakukan praktik manajemen laba, biasanya manajer melakukan tindakan manajemen laba dengan cara memanipulasi komponen laba rugi perusahaan. Menurut Sari & Khafid (2020) dan Kirimi et al, (2022) profitabilitas tidak berpengaruh terhadap manajemen laba.…”

The Financial Signaling And Internal Factor Company Against To Earning Per Share

“…Management is responsible for dayto-day operations and preparing financial reports, but the final decision-making authority rests with the owners and shareholders. However, a dilemma exists where managers acting as agents of equity holders are motivated to act in their own best interests instead of their owners (Kirimi, Kariuki, and Ocharo 2022). Company owners can expect profits from the entity to provide returns to owners (Yunia 2018).…”