Determinants of Commercial Bank Growth Among Listed Banks in Nairobi Securities Exchange

Abstract

The main purpose of the research was to establish determinants of commercial bank growth. The specific objectives of the study was to; determine the effect of default rate on loans on growth of commercial banks, determine the effect of level of interest income on growth of commercial banks and to establish the effect of forex transaction volume on growth of commercial banks listed in Nairobi Securities Exchange. The study was guided by the interest rate theory, international fisher effect theory and time preference theory. Using multiple regression analysis, we found support for the proposition that loan default rate, interest rate and forex transaction had a significant effect on growth of commercial banks.

Keywords: Growth of commercial bank, default rate on loans, interest income and forex transaction volume

DOI: 10.7176/DCS/9-1-06