IMPACT OF MACROECONOMIC VARIABLES ON THE FINANCIAL PERFORMANCE OF THE BANKS LISTED ON THE GHANA SECURITIES EXCHANGE
IMPACT OF MACROECONOMIC VARIABLES ON THE FINANCIAL PERFORMANCE OF THE BANKS LISTED ON THE GHANA SECURITIES EXCHANGE
| dc.contributor.author | DANIEL, BAWUMIA AYAABA | |
| dc.date.accessioned | 2023-11-30T16:01:13Z | |
| dc.date.available | 2023-11-30T16:01:13Z | |
| dc.date.issued | 0200 | |
| dc.description.abstract | One of the most important sectors in the economy constitutes the financial sector as it plays a pivotal function in providing information such as formulating, implementation, monitoring and evaluating macroeconomic variables, fiscal and financial policies for sustainable development (Ken Ofori Atta, 2020 midyear budget). There is the need to explore the impact of macroeconomic variables on the financial performance of the banks listed on the Ghana stock exchange because the ministry of finance engaged in the banking sector cleanup exercise between August 2017 and January 2020 when the country allowed indigenous banks to take over some non-performing banks in the country. This was to strengthen Ghana’s banking sector especially the banks in the Ghana stock exchange. The cleanup according to the government cost GH 11.7 billion as cited in the 2020 budget statement. The cleanup saw a reduction in the number of banks from 34 to 23 currently, whilst 347 microfinance institutions, 15 savings and loans and 8 finance houses had their licenses revoked. Six banks were merged into three banks. They were First Atlantic Merchant Bank Limited and Energy commercial Bank, OmniBank Ghana Limited and Sahel Sahara Ghana as well as First National Bank and GHL Bank Limited. The idea behind this research is to base on the past experience on the banking cleanup to restructure the financial sector specifically the banking sector, This is because the performance of macroeconomic variables are very low in terms of economic development. This can be done by accessing the macroeconomic variables such as inflation, exchange rate, interest rate, of the various banks on the Ghana stock exchange to know the impact, effect and influence on the financial sector of the economy. How well the objectives of a particular institution can be achieved in a specified amount of time can be defined as performance. Performance can be both financial and nonfinancial and hence in financial terms it is described as the ability to produce and sustain profits (European Central Bank, 2010). The general purpose of the study was to understand the impact of macroeconomic variables on the financial performance of the banks listed on the Ghana Securities Exchange. This study was guided by the following research questions: How does inflation rate affect the financial performance of banks listed in the GSE? To what extent does interest rate impact the performance of banks listed in the GSE? And how does exchange rate affect the financial performance of the banks listed in the GSE? An Explanatory research was adopted and the ratio approach was used as the study was seeking to explain the relationship between the independent variables – inflation rate, interest rate and dependent variables – bank performance. The target population for this study was all the banks listed in GSE from 2015 to 2020. These comprises Access Bank Ghana, Agricultural Development Bank, Cal Bank, and Ghana commercial Bank, Fidelity Bank, Standard Chartered Bank, Data Bank, Stanbic bank, Prudential Bank and United Bank for Africa. Census method of data applied. This study made use of the data available in the financial statements of the various banks data base. The first objective was to establish the Impact of inflation rate on the financial performance of banks. A return on investment analysis was done and it established a positive but insignificant ratio between the variables. The second objective was to assert the Impact of Interest Rate on the Performance of Banks. A return on investment analysis was done and it indicated a negative but insignificant ratio bеtwееn interest rate and financial performance. The third and the last objective was to analysis the effects of exchange rate on financial Performance of Banks Listed in the GSE. | |
| dc.identifier.uri | https://ir.aamusted.edu.gh/handle/123456789/1084 | |
| dc.language.iso | en | |
| dc.title | IMPACT OF MACROECONOMIC VARIABLES ON THE FINANCIAL PERFORMANCE OF THE BANKS LISTED ON THE GHANA SECURITIES EXCHANGE | |
| dc.type | Thesis |