Determinants of financial performance in listed commercial banks: a comparative study of Uganda and Kenya

Abstract

This study examines the determinants of Total Shareholder Return (TSR) in listed commercial banks in Kenya and Uganda. Using panel data from 2018 to 2023, the research analyzes the impact of bank-specific factors such as profitability, efficiency, asset quality, capital adequacy, and liquidity on TSR. The findings reveal that profit per branch, total loans, and return on equity (ROE) positively influence TSR, while the number of employees and net interest margin exhibit a negative relationship. Additionally, dividend payout ratio emerges as a significant driver of shareholder returns, reinforcing the importance of consistent and transparent dividend policies. The study highlights the need for operational efficiency, strategic workforce management, and effective credit risk control to enhance financial performance. Policymakers, investors, and bank managers can utilize these insights to optimize decision-making and improve shareholder value. Future research should explore the role of technological advancements and digital banking innovations in influencing TSR in emerging markets.