Arbeitspapier
The effect of revenue diversification on bank profitability and stability during the COVID-19 Pandemic: Evidence from Kenya
This paper uses annual data from Kenyan banks over the 2010-2020 period to empirically analyze the link between diversification (non-interest income) and bank performance. Using dynamic panel regressions, the study finds that banks which diversify (functionally) their sources of revenues tend to be more profitable and financially stable. Importantly, the study finds that reliance on non-interest revenue sources acts as an economically important shock absorber in times of declining profits such as witnessed in the ongoing COVID-19 pandemic. From a policy perspective, these results encourage banks to leverage on new technologies to create non-traditional products whose operating marginal costs are small. This also calls for regulators to remain open to such innovations.
- Language
-
Englisch
- Bibliographic citation
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Series: KBA Centre for Research on Financial Markets and Policy Working Paper Series ; No. 59
- Classification
-
Wirtschaft
- Event
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Geistige Schöpfung
- (who)
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Ochenge, Rogers
- Event
-
Veröffentlichung
- (who)
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Kenya Bankers Association (KBA)
- (where)
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Nairobi
- (when)
-
2022
- Handle
- Last update
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10.03.2025, 11:45 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Ochenge, Rogers
- Kenya Bankers Association (KBA)
Time of origin
- 2022
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