MJAAR

Financial Risk Management And Financial Performance Of Commercial Banks In Uganda: A Case Study Of Centenary Bank Mukono Branch

Mugyenyi Mathew, Kabanda Richard


Abstract

This study investigated the relationship between financial risk management and the financial performance of commercial banks in Uganda, using Centenary Bank Mukono Branch as a case study. Prompted by concerns about the increasing complexity of financial risks confronting Ugandan commercial banks and the inconsistent financial performance reported by the banking sector between 2018 and 2023, the study employed a cross-sectional design with quantitative and qualitative approaches to examine how credit risk management, liquidity risk management, and operational risk management influenced the bank's return on assets (ROA), return on equity (ROE), and net interest margin (NIM). Data were collected from 95 bank staff, including branch management, credit officers, and operations personnel, using structured questionnaires. Findings revealed significant positive relationships between all three risk management dimensions and financial performance indicators. Multiple regression analysis showed that credit risk management, liquidity risk management, and operational risk management collectively explained 67.3% of the variance in financial performance (R² = 0.673, F = 38.94, p < 0.001). Credit risk management emerged as the strongest predictor (β = 0.412, p < 0.001). The study concluded that robust financial risk management is a critical driver of financial performance in Ugandan commercial banking and recommended strengthened risk governance frameworks, enhanced credit appraisal systems, and greater investment in technology-driven risk management tools.

Keywords

Financial Risk Management Credit Risk Liquidity Risk Operational Risk Financial
Metropolitan Journal of Academic and Applied Research

Cite This Article

Mugyenyi Mathew & Kabanda Richard (2026). Financial Risk Management And Financial Performance Of Commercial Banks In Uganda: A Case Study Of Centenary Bank Mukono Branch. Metropolitan Journal of Academic and Applied Research, 5(6). https://journals.miu.ac.ug/pages/article.php?article_id=649

More in This Issue

View full issue →
21
Institutional &#039;gaming practices&#039; and learner exclusion before Primary Leaving Examinations
Dr. Arinaitwe Julius1 , Musiimenta Nancy2 , Akampurira Sarah3
Gaming practices Learner exclusion Primary Leaving Examinations Uganda
22
Inventory Management Practices And Business Profitability: A Case Study Of Supermarkets In Kampala
Akampurira Sarah, Agaba Devis
Inventory management Business profitability Demand forecasting Inventory control
23
Mapping primary-to-tertiary attrition rates and their structural determinants in Uganda&#039;s education system
Dr. Arinaitwe Julius1 , Musiimenta Nancy2 , Akampurira Sarah3
Attrition Education Pipeline Uganda Household Socioeconomic Capital
24
Multi-sectoral coordination challenges in Ugandan social policy implementation
Dr. Arinaitwe Julius1 , Akampurira Sarah2 , Nabaasa Desire3
Multi-sectoral coordination social policy Uganda structural equation modelling
25
Reassessing the &#039;Skills Gap&#039; Narrative: A Critique of Conceptual Displacement in Ugandan Education Policy
Dr. Arinaitwe Julius1 , Ahumuza Audrey2 , Asiimwe Isaac Kazaara3
Ugandan Education Policy