The Impact of Covid-19 Pandemic, Liquidity and Proftability: Experience from Selected Banks in Tanzania
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Date
2022-06-30
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Publisher
African Journal of Accounting and social science (AJASSS)
Abstract
This study aimed to examine the effects of COVID 19 pandemic on the liquidity
and proftability of the Tanzanian banks that are listed in the Dar es Salaam Stock
Exchange. The study realised the objective by comparing the proftability and
liquidity trend before and after the emergence of COVID-19. The differences
between these values were then statistically examined to evaluate the impact
of COVID 19 on the trends before and after the outbreak. The secondary data on
the six selected banks were derived from the audited fnancial accounts for the
six-year period (2016 to 2021), which included the three years prior to and three
years after the COVID 19 outbreak. The results showed that liquidity positions of
most banks had deteriorated. Regarding proftability, the results indicate that
small sized banks experienced more declining proftability than was the case
with big banks. Furthermore, the statistical difference between the means of
liquidity (proxy by liquidity ratio) and proftability (ROA) before and after COVID
19 were statistically insignifcant at a 5 per cent level of signifcance. This implies
that the impact of COVID 19 on liquidity and proftability of the selected banks
was minimal. The study provided an insight on the evidence that to a great
extent the selected listed banks managed to mitigate the impact of COVID-19
pandemic as they were not severely affected resulting from the bailout strategy
devised by the Central Bank of Tanzania (BOT).
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Keywords
COVID-19 pandemic, liquidity, profitability, listed banks