Treasury Bill Investment and Financial Performance of Tier Three Commercial Banks in Kenya
Year: 2024
Type: article
Abstract: Purpose: Bank tier categorization is determined by size, complexity, and regulatory requirements, with criteria varying by country and authority (CBK, 2020). Tier 3 banks are the smallest, providing basic services to individuals and small businesses (CBK, 2020). This study investigated the impact of Treasury bill investment on the financial performance of Tier 3 commercial banks in Kenya. Methodology: This study was grounded on the theory of Capital Asset Pricing. The study used secondary data from the Central Bank of Kenya and audited financial statements from 2015 to 2022. Focusing on Return on Assets, the findings aimed to help Tier 3 banks optimize financial performance. Findings: Results showed that investing in treasury bills significantly improved financial performance of tier three commercial banks. Unique Contribution to Theory, Practice and Policy: The study recommended that policy makers should come up with policies that favor allocating more investment capital towards Treasury bill investment so that banks may seize opportunities to optimize their investment strategies and consequently strengthen their overall financial performance in the market.
DOI: 10.47604/ijfa.2992
Authors: Herbert Aser, Isaac Ochieng’, Gordon Opuodho
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4403259943