TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study
1.2 Statement of the Problem
1.3 Objective of the Study
1.4 Research Questions
1.5 Hypotheses
1.6 Scope and Limitation of the Study
1.7 Significance of the Study
1.8 Operational Definition of Terms
CHAPTER TWO: REVIEW OF LITERATURE
2.1 Conceptual Framework
2.1.1 Asset Liability Management (ALM)
2.1.2 Key Components of Asset Liability Management
2.1.3 Measuring Risk in Alm
2.1.4 Concept of Asset Liability Management
2.1.5 Implications of Basel III on Operational Risk
2.1.6 Components of Non-Interest Income
2.2 Theoretical Framework
2.2.1 Non-Interest Income and Financial Performance
2.2.2. Productivity and Non-Interest Income of Deposit Money Banks
2.3 Factors Determining Non-Interest Income
2.3.1 Market Conditions
2.3.2. Deregulation
2.3.3 Technological Advancement
2.3.4 Bank size
2.3.5 Interest income
2.3.6 Customer deposits
2.3.7 Prevailing (low) deposit interest rates, high lending rate and risk of
non-performing loans (NPLs)
2.3.8 Exposure to Risk
2.3.9 Bank Liquidity
2.3.10 Inflation
2.3.11 Prime Rate
2.4 Empirical Review of Related Studies
2.5 Gaps in the Literature
CHAPTER THREE: METHODOLOGY
3.1 Research Design
3.2 Population
3.3 Sample size and sampling Technique
3.4 Types and Sources of Data
3.5 Method of Data Analysis
3.6 Ethical Considerations
3.7 Limitation of Methodology
CHAPTER FOUR: DATA ANALYSIS, RESULTS AND
DISCUSSIONS OF FINDINGS
4.1 Descriptive Statistics for Variables Employed
Graphical representation of results of the study variables
4.2.1 Test of Hypothesis One
4.2 Empirical Analysis
Regression Model
4.2.3 Test of Hypothesis Two
4.2.4 Test of Hypothesis Three
4.2.4.1 NONIIRATIO2 (with COT)
4.2.4.2 NONIIRATIO2 (without COT)
4.3 Summary of Findings
CHAPTER FIVE: SUMMARY, CONCLUSION
AND RECOMMENDATIONS
5.1 Summary
5.1.1 Summary of Findings
5.2 Conclusion
5.3 Recommendations
5.4 Contribution to Knowledge
5.5 Suggestion for Further Studies
ReferenceS
Appendix
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Banks are very important organizations which help in the execution of socio-economic activities engaged by individuals, business organizations and even sovereign states. They serve primarily as a medium which bridges the gap between surplus and deficit units in an economy. This fundamental function of banks generate interest income which has over the years been the major source of revenue, since loans form a greater portion of the total assets of banks. These assets generate huge interest income for banks which determines their financial performance (Mabvure, Gwangwava, Faitira, Mutibvu & Kamoyo, 2012). In recent times, developments in information and communication technology, increased competition among banking companies as well as the complexity and diversity of businesses and their demands for financial services have compelled banks to consider other banking activities which offer numerous services to clients and boost revenue via fee income generation.
The term non-interest income refers to income earned from sources other than returns on advances or loans to bank clients. They are usually fee or commission generating activities which range from cash management to underwriting activities and custodial services as well as derivative arrangements. As part of total bank earnings, non-interest income is gaining prominence in recent times particularly in the US and Europe, as competition continues vigorously in the traditional banking business of deposit mobilization and loan making.
On the other hand, asset liability management (ALM) is a dynamic process of planning, organizing, coordinating and controlling assets and liabilities – their mixes, volumes, maturities, yields, and costs in order to achieve a specified business objective. The ALM system has different functions to manage risks such as market risk management, trading risk management, liquidity risk management, funding and capital planning, profit planning and growth projection (Kosmidou & Zopounidis, 2004). It enables the banks to make symmetry business decisions in a more informed framework through risks. It is an integrated approach that covers both types and amounts of financial assets and liabilities with the complexities of the financial market.