Volume 4, Issue 3, September 2019, Page: 105-111
Correlational Study Between Capital Markets and Financial Performance of Commercial Banks in Rwanda
Mbonigaba Celestin, Business and Development Studies, Kibogora Polytechnic, Nyamasheke, Rwanda
Received: Jul. 13, 2019;       Accepted: Aug. 5, 2019;       Published: Aug. 29, 2019
DOI: 10.11648/j.ijafrm.20190403.13      View  37      Downloads  19
Abstract
The main objectives of this study were to examine the link between Capital Markets and the Financial Performance of Commercial Bank. The study was guided by three objectives such as: To examine the effect of equity market on the financial performance, to assess the effect of bond market on the financial performance, to establish the effect of securitized products on the financial performance of Bank of Kigali. The study adopted quantitative approach to collect data from 32 respondents’ employees of BK by using purposive sampling technique. Data collected was analyzed using SPSS, and the instruments of data collection were questionnaire, interview, and documentary techniques. The results show that perceptions of respondents about effect of bond market on the financial performance of Bank of Kigali Rwanda show that more than 84.4% of respondents confirmed that Size of Equity market affects market capitalization for generating net profit margin for BK; and 84.4% that size dimension of equity market reflects turnover ratio of BK. The R-Square was.759 while ANOVA shows the Sum of Squares of 7.875. The results on the effect of bond market on the financial performance of Bank of Kigali confirmed by 84.4% of respondents who said that Bond market of BK helps to increase its interest income; and 78.1% of respondents confirmed that accessibility of Bond market facilitates an increase of capital gain to BK in Rwanda. R-Square was.610 and ANOVA table shows that Sum of Squares of 7.875. The effect of securitized products on the financial performance of Bank of Kigali confirmed by more than 84.4% who said that commercial mortgages offered by BK increases the internal return of this commercial bank; 78.1% of respondents participated in the study confirmed credit card receivables facilities BK to increase income from borrowers of this bank; and 68.8% agreed that the Auto loans and student loans of BK increase the net profit margin. R-Square was 743 and its adjusted R-Square was.638. ANOVA table shows that Sum of Squares was 7.875 combining the regression of 5.850; and residual of 2.025. Mean Square was.650 for regression while.092 was on the side of residual in the Mean Square. As conclusion, based to the findings, there is significant positive effect of Capital Market son the financial performance of Bank of Kigali in Rwanda.
Keywords
Capital Market, Financial Performance, Commercial Banks
To cite this article
Mbonigaba Celestin, Correlational Study Between Capital Markets and Financial Performance of Commercial Banks in Rwanda, International Journal of Accounting, Finance and Risk Management. Vol. 4, No. 3, 2019, pp. 105-111. doi: 10.11648/j.ijafrm.20190403.13
Copyright
Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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