Performance of Non-African Foreign Commercial Banks in Uganda
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Date
2017
Journal Title
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Volume Title
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Abstract
The focus of this study was to establish key factors responsible for the performance of non-
African foreign Commercial banks in Uganda, in the light of Global Advantage Theory. The
analysis was supplemented by structure–conduct performance (SCP) and efficiency hypothesizes
(ES).
The study analysed the performance of licensed non-African foreign commercial banks on
average, over the period 2000-2011, using Linear multiple regression analysis. The study
findings showed that, management efficiency, capital adequacy and reputation/goodwill are key
factors affecting the performance of non-African foreign commercial banks in Uganda. On the
contrary, credit risk has a negative impact on performance of non-African foreign commercial
banks in Uganda. On a positive note, diversification, investment in securities and correct
prediction of inflation are factors that drive the enhanced performance of non-African foreign
commercial banks in Uganda.
The emerging policy implication is that commercial banks’ managements should focus on
improving: management efficiency; bank reputation/goodwill; credit risk management; capital
adequacy levels; diversification and investment. In addition, monetary policy regulations and
instruments should not enforce high liquidity and capital adequacy levels. There is also need for
regulations on non-interest income activities to harmonize the impact of diversification on all
commercial banks’ performance and avoid the exploitation of commercial banks’ customers.
Description
Keywords
Bank performance, Non-African foreign commercial banks, Internal and External factors
Citation
Nsambu, K. F., & Ddumba-Ssentamu, J. (2017). Performance of non-African foreign commercial banks in Uganda.