Analysis of the factors affecting Commercial Banks Financial Performance: Evidence from Tanzania

Abstract

Purpose: The study examined the factors affecting the financial performance of fifteen commercial banks in Tanzania over ten years, from 2012 to 2021. This study focused much on specific internal factors.

Design/methodology/approach: The study employed descriptive research design to ascertain the causal relationship between the dependent variable and independent variables within commercial banks in Tanzania. Secondary data were obtained from audited financial statements and annual reports. Before regression analysis, preliminary tests were performed and diagnostic tests were conducted.

Findings: Findings indicate that the financial performance of commercial banks in Tanzania is influenced by bank size, earning quality management, assets quality management, and capital adequacy

Research Limitations/Implications: The study covered from 2012 through 2021, this study employed CAMEL analysis on Tanzania commercial banks.

Practical implications: This study provides valuable insights to policymakers and bank owners on the factors that influence bank performance and ensure optimal utilization of resources to sustain competitiveness.

Keywords: asset quality, capital adequacy, commercial banks, financial performance