Bank size and bank earnings volatility. A survey of Kenya banking system
Journal Title: Journal of Economics, Finance and Management Studies - Year 2023, Vol 6, Issue 02
Abstract
Based on the increased interest on bank size in literature, we sought to investigate the effect of large banks on bank earnings volatility in Kenya banking system. Our data cover the period from 2005 to 2020. Included in our analysis is ROA volatility (ROE volatility) and market volatility, as measures of bank earnings volatility at bank level and at market level respectively. In addition, we used bank risk, at individual bank level and at market level, for further analysis in our model. Our findings have shown that bank size positively and significantly affect the bank earnings volatility as measured using ROA volatility, but an inverse and insignificant effect on ROE volatility. We also find that growth in bank size positively and significantly affect their individual risk exposure, but does not increase the market risk. Our findings have policy implications in considering optimal bank size, bank risk and systemic risk.
Authors and Affiliations
Gabriel Kamau KUNG’U,Régine UWIHIRWE,Ambrose NZAMALU
Keywords
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- EP ID EP726825
- DOI 10.47191/jefms/v6-i2-35
- Views 40
- Downloads 0
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