Nexus Between Operational Efficiency and Profitability from Tanzanian Listed Commercial Banks at Dar es Salaam Stock Exchange

James Daniel Chindengwike

doi:10.51867/ajernet.5.4.93

Authors

James Daniel Chindengwike
chindengwikejames@gmail.com
St. John's University of Tanzania, Dodoma, Tanzania https://orcid.org/0000-0002-1717-8759

Keywords:

Commercial Banks, Operational Efficiency, Profitability, Tanzania

Abstract

The profitability of any commercial bank is very essential and can be determined by operational efficiency. The aim of this paper is to assess the connection between operational efficiency and profitability from Tanzanian listed commercial banks at Dar es Salaam Stock Exchange (DSE). Efficiency Structure Hypothesis was used in this study. A quantitative research approach adopted in this research, cross sectional research design was used in this study, was applied in the study. The sample size of the study includes 70 observations in total from population of 7 listed commercial banks at DSE between 2014 and 2023 (Annual data). Data extracted from the reliable source DSE. Data for the paper was collected through documentary review from various financial statement reports. Random sampling procedure was opted in this study. The data from the study were analyzed using panel data regression. The findings indicated that there is a statistical significance between commercial banks' profitability and operational efficiency from Tanzanian listed commercial banks at DSE (P-value = 0.672) >0.05). The study concluded that operational efficiency has an impact on the bank profit of Tanzanian listed commercial banks at DSE. This applied that the banks should maintain their profitability while running at low cost. The study recommended that Tanzanian listed commercial banks at DSE must preserve their operational efficiency in order to save the operational expenses so as to boost the bank profit.

Dimensions

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