Comparative Analysis of Financial Performance of Commercial Banks in Tanzania

Abstract

This paper analysed the financial performance of commercial banking sector in Tanzania for the period of 7 years from 2006 to 2012. Financial ratios were employed to measure the profitability and liquidity of banks; in addition Analysis of Variance (ANOVA) was used to test the significance differences of profitability means among peer banks groups. The study found that overall bank financial performance increased considerably in the first two years of the analysis. A significant change in trend is noticed at the onset of the global financial crisis from 2008 to 2009. However, Tanzania banking sector remained stable; banks are adequately capitalized and profitable and remained in a sound position. The study found that, there is no a significant means difference of profitability  among of peer banks groups in term of ROA, however, a significance differences among banks group is existed in term of ROE and NIM.

Key words: financial performance, financial ratios, commercial banks, Tanzania