An investigation of charges and performance of commercial in Riziki Mathewcleophas Master of Business Administration, Business School, 2015

The study examined nature, trend and relationship between bank charges and performance of in Tanzania using panel data of five banks from 2011 to 2013 on annual basis. In doing so, the study applied the statistical measures and the results were presented on graphs and tables. Linear regression model was used in testing the relationship between bank charges and the performance of commercial banks. The results on nature of the bank charges indicated that some services had average high charges (Issuing ATM Card Local Charge) while others had low charges (Mobile Transfer Charge) within the studied banks. Fluctuation rates on the amount of charges differed from one to another, making it difficult to find homogenous charges on the similar products and services. The result on trends indicated that, PLC and CRDB Bank PLC had a positive trend that is their number of bank charges increased over time. National Microfinance Bank PLC had constant trends, while DCB Commercial Bank PLC and National Bank of Commerce Ltd had negative trends on number of charges per year. The trends on the average charges imposed by the bank over the year indicated that CRDB Bank PLC, National Bank of Commerce Ltd, DCB Commercial Bank PLC and National Microfinance Bank PLC had positive trends, while Akiba Commercial Bank PLC indicated negative trends. In analysing the relationship between bank charges and the performance of Commercial Banks, two hypotheses were formulated on bank charges against Return on Assets and Return on Equity. The results indicated that Issue of ATM Card Local Charge was found to be significant on both Return on Assets and Return on Equity, while ATM Withdraw Charge on Others was found to be significant on Return on Assets only. The other variables: Cheque Book Charge, Mobile Transfer Charge, Inward Fund Transfer Cost and ATM Withdraw Charge on Us were found to have no significant on both Return on Assets and Return on Equity respectively. The findings of the study contribute to the understanding of the nature, trend of the bank charges and their relation to the performance of commercial bank in Tanzania. It calls for the closer examination of the commercial bank diversification of fee generating services and the nature of the bank charges in relation to the performance of financial institutions