Loan Restructuring and Financial Performance of Commercial Banks in Kenya


  • Risper Siroma Makui Kenyatta University
  • Dr. Farida Abdul Kenyatta University
  • Dr. Salome Musau Kenyatta University



Corporate Restructuring, Financial Performance, Commercial Banks, Loan Restructuring, Financial Technology


The study sought to evaluate the influence of corporate restructuring on the performance of commercial banks in Kenya. The financial performance of Kenyan banking institutions has been improving over the last five years. However, there was a reported decline in profitability in 2020, dropping from 159.1 billion shillings to 112.1 billion shillings. The specific objectives were to determine the effects of loan restructuring, non-interest income restructuring, financial technology restructuring, and the moderating role of bank size in the relationship between corporate restructuring and financial performance. The study was based on four theories: the technology acceptance model, financial intermediation theory, agency theory, and profit maximization theory. It adopted a causal research design and included 40 commercial banks operating in Kenya as of December 31, 2020, as the population. Secondary data collected from the Central Bank of Kenya covered a two-year period from January 2020 to December 2021. The data analysis included the use of descriptive statistics and panel regression analysis. Diagnostic tests were also performed to confirm that the assumptions required for regression analysis were satisfied. The findings revealed that loan restructuring, non-interest income restructuring, and financial technology restructuring all had a positive and statistically significant impact on the financial performance of commercial banks in Kenya. However, bank size did not moderate the relationship between corporate restructuring and financial performance. In conclusion, corporate restructuring significantly influenced the financial performance of commercial banks in Kenya. Based on the findings, the study recommends that banking institutions should enhance their use of technology in banking services. Commercial banks can develop secure and tamper-proof banking applications with robust security measures. Additionally, they can leverage technology to assess customers' creditworthiness based on personal information. Finally, commercial banks should consider diversifying their operations to improve their overall performance

Author Biographies

Risper Siroma Makui , Kenyatta University

Student, School of Business, Economics and Tourism, Kenyatta University

Dr. Farida Abdul, Kenyatta University

Lecturer, School of Business, Economics and Tourism, Kenyatta University

Dr. Salome Musau, Kenyatta University

Lecturer, School of Business, Economics and Tourism Kenyatta University


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How to Cite

Makui , R. S., Abdul, F., & Musau, S. (2024). Loan Restructuring and Financial Performance of Commercial Banks in Kenya. Journal of Finance and Accounting, 8(3), 1–21.




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