Corporate governance is an essential characteristic of the financial performance of private commercial banks. The present work attempts to establish the cause-effect relationship between the independent variable (corporate governance) and the dependent variable (financial performance). Hence, the current paper thoroughly examines the financial performance of commercial banks listed on the Dar es Salaam Stock Exchange with the objective of examining the impact of corporate governance on their economic characteristics. For instance, some of the commercial banks on the platform include CRDB Bank PLC, Mwalimu Commercial Bank, NMB Bank, Mkombozi, and DCB (“Listed companies,” 2022). It is possible to compare the financial performance of the mentioned companies with other commercial banks in Tanzania that are not listed on the Dar es Salaam Stock Exchange to examine the cause-effect relationship of the independent and dependent variables (“List of banks,” 2022).
For instance, Magoma et al. (2021) analyzed the financial performance of NMB and CRDB (listed on the Dar es Salaam Stock Exchange), finding that liquidity position and earning capacity are the most significant factors. The current work could further investigate how the financial performance of these banks is affected by corporate governance by comparing it with other commercial banks outside of the Dar es Salaam Stock Exchange (“NMB Bank Plc,” 2022; “CRDB Bank Plc,” 2022). Most examined banks demonstrate higher profits in 2022 compared to previous fiscal years; however, some of the metrics in the financial performance could be analyzed to determine the potential flaws in the planning. For instance, the reduction in cash flow in the CRDB Bank statement could designate inoperable acquisitions or liabilities (“CRDB Bank Plc,” 2022). Ultimately, the financial performance of the five examined banks in the Dar es Salaam Stock Exchange might reveal significant insights into the relationship between corporate governance and financial performance.
References
CRDB Bank PLC. (2022). Web.
Listed companies. (2022). Web.
List of banks in Tanzania in 2022. (2022). Web.
Magoma, A., Mbwambo, H., Sallwa, A. A., & Mwasha, N. (2021). Financial performance of Commercial Banks and the Camel model. A case of National Microfinance Bank and Cooperative Rural Development Bank in Tanzania. The Second Business and Economic Development Conference (BEDC, 2021), 617-628.
Mkombozi Commercial Bank. (2022). Web.
NMB Bank Plc. (2022). Web.