Effect of cash management on the profitability of financial institutions: a case of Equity bank Kabalagala branch

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Kampala International University.College of Economics and Management
The purpose of the study was to establish the effect of cash management on the profitability of financial institutions with specific emphasis on establishing the various cash management techniques, the level of profitability and the relationship between cash management and profitability of Equity Bank. The research design adopted in this study was a case study design. The study population included the staff of Equity Bank on Kabalagala Branch a total of 30 respondents was selected for the study. Simple random sampling was used to select respondents in the field. The questionnaires were used and administered to the employees working with the bank. Data from the questionnaires was coded, entered, edited for consistency and easiness in and later analyzed using Statistical Package for Social Scientists (SPSS) where correlation was used to establish the relationship between cash management and profitability of Equity Bank. Regarding the study findings, it was revealed that cash management in Equity Bank affects profitability levels. The findings also showed that the bank employs several cash management techniques in order to reduce fraud of cash in the bank. The study also showed that profitability levels were high in the bank. Findings on cash management in Equity Bank, it was revealed that the cash management techniques are in place but they are not so effective. The bank carries out cash planning , it prepares cash budgets, tries to maintain some cash balance but its not optimum, all of these are done by the bank but are not effective. The researcher recommended that there is need for deploying a cash management system which involves support and coordination among multiple departments. Banks need to pick the right cash management provider who can coordinate the physical and technological installation of the system can significantly expedite and smooth the process of ensuring profit maximization. Each department should carefully consider features and functionality that will be required for a successful deployment and utilization of cash management which also increases profitability.
Research report submitted to the College of Applied Economics and Management Sciences in partial fulfillment of requirements for the award of bachelors degree in Business Administration of Kampala International University
Cash, Management, Profitability, Financial, Institutions, Equity bank