Over the years, real estate financing has been a preserve for mortgage financing companies. With time, commercial banks have started engaging in mortgage financing. With the rising non-performing loans among Kenyan banks, mortgages have seen as a safer bet to improve the loan portfolio performance. The study sought to investigate the effect of real estate finance on the financial performance of listed commercial banks in Kenya. Data for nine listed commercial banks was collected for the period 2009 – 2013 from the annual reports of the respective banks. Panel regression analysis was employed on the collected data. The results showed that real estate finance did not have a significant effect on the financial performance of listed commercial banks. Foreign ownership, market structure, cost of bank operations, and the size of the bank significantly influenced bank performance. The study concludes that real estate finance does not influence the financial performance of listed commercial banks. It is recommended that the Central Bank of Kenya (CBK) and stakeholders in the housing sector strategize to improve uptake of affordable mortgage loans in order to improve the overall performance of banks. This study contributes to literature by providing the link between real estate financing and the financial performance of banks from a developing country’s perspective in Sub-Saharan Africa where housing demand is on the rise and therefore offers enormous opportunity for rapid growth for banks. Further areas for research are recommended.
| Published in | Journal of Finance and Accounting (Volume 3, Issue 4) |
| DOI | 10.11648/j.jfa.20150304.11 |
| Page(s) | 61-68 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2015. Published by Science Publishing Group |
Real Estate, Mortgage, Central Bank of Kenya, Nairobi Securities Exchange, Kenya
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APA Style
Fredrick Onyango Odhiambo. (2015). The Effect of Real Estate Finance on the Financial Performance of Listed Commercial Banks in Kenya: A Panel Evidence. Journal of Finance and Accounting, 3(4), 61-68. https://doi.org/10.11648/j.jfa.20150304.11
ACS Style
Fredrick Onyango Odhiambo. The Effect of Real Estate Finance on the Financial Performance of Listed Commercial Banks in Kenya: A Panel Evidence. J. Finance Account. 2015, 3(4), 61-68. doi: 10.11648/j.jfa.20150304.11
AMA Style
Fredrick Onyango Odhiambo. The Effect of Real Estate Finance on the Financial Performance of Listed Commercial Banks in Kenya: A Panel Evidence. J Finance Account. 2015;3(4):61-68. doi: 10.11648/j.jfa.20150304.11
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Download@article{10.11648/j.jfa.20150304.11,
author = {Fredrick Onyango Odhiambo},
title = {The Effect of Real Estate Finance on the Financial Performance of Listed Commercial Banks in Kenya: A Panel Evidence},
journal = {Journal of Finance and Accounting},
volume = {3},
number = {4},
pages = {61-68},
doi = {10.11648/j.jfa.20150304.11},
url = {https://doi.org/10.11648/j.jfa.20150304.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20150304.11},
abstract = {Over the years, real estate financing has been a preserve for mortgage financing companies. With time, commercial banks have started engaging in mortgage financing. With the rising non-performing loans among Kenyan banks, mortgages have seen as a safer bet to improve the loan portfolio performance. The study sought to investigate the effect of real estate finance on the financial performance of listed commercial banks in Kenya. Data for nine listed commercial banks was collected for the period 2009 – 2013 from the annual reports of the respective banks. Panel regression analysis was employed on the collected data. The results showed that real estate finance did not have a significant effect on the financial performance of listed commercial banks. Foreign ownership, market structure, cost of bank operations, and the size of the bank significantly influenced bank performance. The study concludes that real estate finance does not influence the financial performance of listed commercial banks. It is recommended that the Central Bank of Kenya (CBK) and stakeholders in the housing sector strategize to improve uptake of affordable mortgage loans in order to improve the overall performance of banks. This study contributes to literature by providing the link between real estate financing and the financial performance of banks from a developing country’s perspective in Sub-Saharan Africa where housing demand is on the rise and therefore offers enormous opportunity for rapid growth for banks. Further areas for research are recommended.},
year = {2015}
}
TY - JOUR T1 - The Effect of Real Estate Finance on the Financial Performance of Listed Commercial Banks in Kenya: A Panel Evidence AU - Fredrick Onyango Odhiambo Y1 - 2015/06/09 PY - 2015 N1 - https://doi.org/10.11648/j.jfa.20150304.11 DO - 10.11648/j.jfa.20150304.11 T2 - Journal of Finance and Accounting JF - Journal of Finance and Accounting JO - Journal of Finance and Accounting SP - 61 EP - 68 PB - Science Publishing Group SN - 2330-7323 UR - https://doi.org/10.11648/j.jfa.20150304.11 AB - Over the years, real estate financing has been a preserve for mortgage financing companies. With time, commercial banks have started engaging in mortgage financing. With the rising non-performing loans among Kenyan banks, mortgages have seen as a safer bet to improve the loan portfolio performance. The study sought to investigate the effect of real estate finance on the financial performance of listed commercial banks in Kenya. Data for nine listed commercial banks was collected for the period 2009 – 2013 from the annual reports of the respective banks. Panel regression analysis was employed on the collected data. The results showed that real estate finance did not have a significant effect on the financial performance of listed commercial banks. Foreign ownership, market structure, cost of bank operations, and the size of the bank significantly influenced bank performance. The study concludes that real estate finance does not influence the financial performance of listed commercial banks. It is recommended that the Central Bank of Kenya (CBK) and stakeholders in the housing sector strategize to improve uptake of affordable mortgage loans in order to improve the overall performance of banks. This study contributes to literature by providing the link between real estate financing and the financial performance of banks from a developing country’s perspective in Sub-Saharan Africa where housing demand is on the rise and therefore offers enormous opportunity for rapid growth for banks. Further areas for research are recommended. VL - 3 IS - 4 ER -
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