The Relationship Between Bank Capital Adequacy and Financial Efficiency of Commercial Banks in Zimbabwe 2006-2021
- Author
- Mutodi, Peter. P
- Title
- The Relationship Between Bank Capital Adequacy and Financial Efficiency of Commercial Banks in Zimbabwe 2006-2021
- Abstract
-
The study investigates the relationship between the capital adequacy and the financial efficiency
of commercial banks in Zimbabwe. Statistical Package for the Social Sciences (SPSS) was used
to analyze the data, including descriptive statistics, correlation analysis and regression analysis
with the aim of identifying the determinants of capital adequacy and financial efficiency. This
research would describe the connections between the explanatory variables, bank capital
sufficiency, bank size, and asset quality, and the response variable, financial efficiency.
Secondary data was generated from the RBZ portal for the period 2006 to 2021. SPSS software
was used to run data. The research finds that capital adequacy is a significant determinant of
financial efficiency, with banks that maintain higher levels of capital adequacy tending to have
higher financial efficiency. It also finds that banks with a higher level of profitability tend to
have higher levels of financial efficiency. Macroeconomic factors such as inflation and exchange
rate fluctuations have a significant impact on the financial performance of commercial banks in
Zimbabwe, with banks experiencing higher levels of non-performing loans and lower levels of
profitability during periods of high inflation and exchange rate fluctuations. The study
recommends that the Zimbabwean authorities should implement stricter regulations on bank
capital adequacy to ensure that banks maintain sufficient levels of capital to absorb potential
losses. The research also recommends that banks should improve their risk management
practices, including their risk-taking behavior and asset quality management, to ensure that they
can maintain adequate levels of capital and financial stability. - Date
- 2023
- Publisher
- BUSE
- Keywords
- Bank Capital Adequacy
- Financial Efficiency
- Supervisor
- Mr. Basira
- Item sets
- Department of Statistics and Mathematics
