Profitability and Quality of Voluntary Disclosure among Commercial Banks in Kenya
DOI:
https://doi.org/10.53819/81018102t2275Abstract
The banking sector is featured and prioritized as one of the six key drivers of economic growth in Kenya’s Vision 2030 as it plays a central role in mobilizing resources. The bank operations transparency and information disclosure are amongst the key elements of governance as lack of it can gradually weaken the trust of all parties in the bank’s contracts. The specific objectives was to establish the effect of profitability on the quality of voluntary disclosure among Kenyan commercial banks. This study was guided by signalling theory. This study adopted positivistic philosophy and explanatory research design. The study period was between the years 2013- 2020 and 38 out of 41 commercial banks in Kenya licensed by the Central Bank of Kenya as at 2020 were selected as the sample using purposive sampling method. The data was extracted and compiled for evaluation from the financial statements using the document review guide. Descriptive and inferential statistics evaluated the data. Pearson correlation analysis was done to show correlation between variables and a panel regression model was used. The study found that profitability has a significant positive influence on quality of voluntary disclosure of commercial banks. It is recommended that banks should prioritize strategies that enhance their profitability. This is crucial for maintaining financial stability, as higher profitability allows for the accumulation of retained earnings, which in turn act as buffers to absorb potential losses.
Keywords: Profitability, Quality of Voluntary Disclosure & Commercial Banks
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