Impact of Banking Supervision Regulations on Financial Performance of Banks in Tanzania.

Sweke, James (2020) Impact of Banking Supervision Regulations on Financial Performance of Banks in Tanzania. Masters thesis, The Open University of Tanzania.

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Abstract

The study evaluated the impact of banking supervision regulations on financial performance of banks in Tanzania. Secondary data from BOT, descriptive and quantitative research design is used. Combined financial performance data for all banks that was obtained from BOT were used to analyse the banking sector performance from 2010-2018 dividing it into two phases of before new regulations implementation (2010-2013) and after new regulations implementation (2013-2018). The study noted that 20 out of 26 BOT regulations were implemented between 2013 and 2015. To operationalize the analysis, the banking regulations were set to be independent variable measured in a time series and the bank financial performance was set to be dependent variable, measured with ROA, ROE and NIM financial soundness indicators. Trend and regression analysis were performed on the datasets and results were presented. The result showed that there was an increasing trend of financial performance of banks in a period from 2010-2013 and a decrease trend from 2013-2018. The analysis noted high score of goodness of fit, correlation and internal consistency to conclude that there is a correlation between the declining financial performance pattern of banks and the banking supervision regulations implementation in Tanzania. The study emphasizes on participatory regulations implementation that all stakeholders be involved from initial stages in the development of the banking supervision M&E systems to attract compliance, streamlined monitoring and evaluation, enhance information sharing and informed decision making, learning, transparency, accountability and capacity building. Keywords: Financial Performance, Regulation, Banking Supervision & Bank.

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