Intervening role of Risk Management on the relationship between Mergers and Acquisitions and Financial Performance of Commercial Banks in Kenya

Abstract

Abstract

The objective of this paper was to examine intervening role of risk management on the relationship among mergers and acquisitions strategies and commercial bank financial performance. A correlational descriptive research design and positivism paradigm was used to accomplish the project's goals. The thirty Kenyan commercial banks that had undergone mergers and acquisitions by 2017 formed the population of the study. The data was gathered from publicly available financial statements, which were split into two; three years before and three years after mergers and acquisitions, with the transaction year been excluded. To determine the mathematical connection among the variables in the study, multiple regressions were used. The study's findings revealed that; risk management failed to mediate the relationship between mergers and acquisitions strategies and commercial bank financial performance, thus failing to reject null hypothesis. The findings of the research provide answers to the inconsistences found in the prior reviewed studies by empirically testing the study variables thus contributing to knowledge by providing new insights based on the variables studied. The research findings further contribute to the policy and practice in the sense that; the insights will help decision-making processes geared toward targeted outcome. The study results are limited to elements of the study and hence a recommendation of similar study using other attributes in varied context and scope.

Keywords: Risk management, Mergers and Acquisitions, Financial performance