Impact of COVID-19 on the Relationship between Credit Risk and Financial Performance of Commercial Banks in Kenya

The study sought to establish the impact of COVID-19 on the relationship between credit risk and the financial performance of commercial banks in Kenya. A descriptive research design that targeted all commercial banks in Kenya was adopted and focused on two eras, pre and post-COVID-19 and sought to find out the impact it had on the variables under study. The results indicated the existence of a positive and significant correlation between the Capital adequacy ratio and return on assets. It also established a moderately strong positive relationship between liquidity ratio and return on assets among the banks reviewed. It further established a weak positive relationship between the total assets held by the banks and the return on assets. On the other hand, the study established a negative slope and significant correlation between Non-Performing Loans ratio and Return on assets. Subsequently, the study established that Capital adequacy ratio, Liquidity ratios and Total assets had a significantly positive relationship with the Return on Assets of the identified banks operating within Kenya. In this regard, the study recommends further studies, especially on mobile loan products, in view of how well banks perform. One key area would be the impact of mobile loans on the credit risk to banks.