Corporate social responsibility and the performance of commercial banks in Uganda

Abstract

This research examines the relationship between corporate social responsibility and financial performance of commercial banks in Uganda. The research mainly focused on preservation of the environment, sponsoring of social events and giving charity to the needy as the CSR elements and how they contributed to the financial performance of commercial banks. The companies analyzed in this paper are Centenary Bank and Stanbic Bank Uganda as their participation in CSR is paramount and evident in activities like charity to the needy such as the cancer runs, water provision and concern for customers and yet they seem to be among of the most successful banks in Uganda. The researcher employed a case study design using the quantitative study approach where questionnaires were used as primary tools using random sampling techniques and document review as a secondary tool for data collection which was analyzed using descriptive analysis. The sample size of the study constituted of 97 respondents where the study population was 127 respondents. Findings indicate that the two banks carryout environmental management and they sponsor social events to ensure their effectiveness and efficiency. The banks also have a well-defined committee which manages its social responsibility activities and a sound monitoring system which enables the banks to improve on the activities thus enabling the bank improve on its financial performance. In conclusion, CSR positively affects the financial performance of commercial banks as it was seen among the customers as a form of advertising and display a good image to the public The study recommends that Centenary bank and Stanbic bank should strengthen their CSR element in the country to increase on their profitability and provide value for shareholders.