ABSTRACT
The respective impact of the factors that drive bank profitability has been a great source of
debate within academia and the banking industry. The objective of this empirical work is to fill
the knowledge gap by assessing the impact of selected bank-specific risks on financial
performance within the local context of a developing country. The study examined into details
the trends in bank-specific risks and examines the effects of these idiosyncratic factors on bank
performance in Ghana. Factors investigated as part of this study were categorized into Risk and
Non-risk factors. The study focused on three bank-specific risks; Credit, Liquidity and
Operational exposures.
To probe the hypothesized adverse effects of bank-specific risks, a holistic analysis was
performed using a panel dataset of sixteen (16) universal banks in Ghana with secondary
financial data collected for a ten-year period (2009 – 2018). A random effects model was
estimated with further analysis conducted using summary statistics and a correlation matrix. The
findings demonstrate that operational risk, bank size and capitalization significantly influence the
financial performance of banks. Directionally, liquidity risk has a positive effect on performance
as well as a strong, positive association with credit exposures of a bank. Practical implications of
the findings include the formulation of strategies to jointly mitigate credit and liquidity risk and
implementation of robust event reporting systems to manage operational risks by banks.
BOATENG, A (2021). Bank-Specific Risks And Performance Of Universal Banks In Ghana. Afribary. Retrieved from https://afribary.com/works/bank-specific-risks-and-performance-of-universal-banks-in-ghana
BOATENG, ALBERT "Bank-Specific Risks And Performance Of Universal Banks In Ghana" Afribary. Afribary, 15 Apr. 2021, https://afribary.com/works/bank-specific-risks-and-performance-of-universal-banks-in-ghana. Accessed 27 Nov. 2024.
BOATENG, ALBERT . "Bank-Specific Risks And Performance Of Universal Banks In Ghana". Afribary, Afribary, 15 Apr. 2021. Web. 27 Nov. 2024. < https://afribary.com/works/bank-specific-risks-and-performance-of-universal-banks-in-ghana >.
BOATENG, ALBERT . "Bank-Specific Risks And Performance Of Universal Banks In Ghana" Afribary (2021). Accessed November 27, 2024. https://afribary.com/works/bank-specific-risks-and-performance-of-universal-banks-in-ghana