The effect of financial due diligence on financial performance of commercial banks listed in Nairobi securities exchange

  • Sophy O. Akuku
  • Andrew Nyang’au
  • Christopher Ngacho


This study sought to establish the relationship between financial due diligence and financial performance of commercial banks listed at Nairobi Securities Exchange.  The study provided useful information to policy makers and regulators to design target policies and programs that stimulate the growth and sustainability of commercial bans listed (NSE).  The study findings benefited management adherence and its effect on risk mitigation in operation of banks,add value to researchers and scholars, academicians and researchers for further research, investors for setting up commercial banks or grading investment to commercial banks listed and financial analysts and consultants enabled them improved financial services on investment decisions.   The study failed to includes some of objectives which are vital when handling financial due diligence in commercial banks.  The specific objectives were:  to determine the effect of liquidity level, and debt management on financial performance. This study employs a descriptive research design.  The sampling technique of this study was drawn from eleven commercial banks listed at (NSE).  Secondary data was collected from website of CBK and published banks annual financial performance.  The target population comprised of the 11 commercial banks listed (NSE). The data was analyzed using descriptive statistics techniques and multiple regression analysis, correlation analysis and t test value analysis. The study found that liquidity level had positive and not statistically significant on financial performance.  The study recommends that the team should developed strategies, policies and rules to avoid the poor financial performance.

Key words: Financial due diligence; Financial performance; Commercial banks; Nairobi Securities Exchange