Liquidity and Financial Performance

The aim of this study was to determine the relationship between liquidity risk and financial performance of commercial banks in Kenya. The research used a descriptive research design. All commercial banks that were actively operational over the five fiscal years (1st January 2011 - 31st December, 2015) formed the targeted population for the study. Secondary data on the net profits, gross loans, gross non-performing loans, liquidity ratio, customer deposits, and total assets was retrieved from the publications of the annual reports to accomplish the research objectives. With the help of the Statistical Package for Social Sciences (SPSS), the data was analyzed using descriptive statistics, correlation and regression analysis as these are conventionally approved tools for descriptive research designs.