Impact Of Treasury Risk Management On The Financial Performance Of Commercial Banks In Kenya

Abstract

The study sought to establish the influence of treasury risk management on the financial performance of commercial banks in Kenya, specific study objectives were aimed at assessing the extent to which operational risk analysis influence performance of banks, evaluating the role of credit risk management influence performance of banks and finding out to what extent does currency risk management influence performance of banks. Financial and non-financial risks are inherent in every commercial bank in Kenya and the government thus have sound treasury risk management to achieve its priority in sound fiscal management. Banks have the right to embed appropriate financial risk management strategies and business planning to achieve healthy financial performance. The study adopt a descriptive research design. The research tool consisted of questionnaires that administered to the selected commercial banks and multiple regression used for data analysis. A target population of 314 senior management staff selected from 157 commercial bank branches in Nairobi central Business District, a sample frame of 63 respondents selected, this represents 20% of the target population. The study establish the relationship between the independent sub variables of treasury risk management and financial performance of commercial banks. From the study finding, it was evident that credit risk management and currency risk management have a positive and significant impact on the financial performance of commercial banks at 0.968 and 0.131 respectively. The analysis showed that when all factors are constant, financial performance was -1.038