Comparative analysis of local and international credit rating assessments of Tanzanian commercial banks
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Date
2020
Authors
Journal Title
Journal ISSN
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Publisher
The University of Dodoma
Abstract
Credit rating assessment to entities, such as commercial banks in Tanzania, is still under the infant stage. This study made a comparative analysis of local and international credit rating assessments of Tanzanian commercial banks. It adopted time series research design in measuring the variables in ratios, data covered published secondary quarterly financial report from 2009-2019. The study also made 40 observations from each bank based on CRDB and NMB commercial banks to analyze the rating assessment.
The analysis revealed that, in credit assessments, Tanzanian commercial banks of NMB and CRDB are likely to suffer significantly from capital adequacy, management quality, earning capability and liquidity. The study further findings showed that the Tanzanian regulatory system (locally) considerers lower standards as compared to international standards. CRDB and NMB combined had satisfactory outlook rating scores that signified fundamentally soundness with modest amendable weakness (rating average of „2‟). However, NMB appeared to be better in ratings than CRDB in the period of 10-years analyzed quarterly.
The study recommends local systems to consider the establishment of sophisticated standards to indicators in credit rating assessments, such as management competence and earning capability since they significantly affect the credit rating assessments with reference from international standards to upgrade and improve the position of the credit rating scores to Tanzanian commercial banks given the unstable economies
Description
Dissertation (MBA)
Keywords
Commercial bank, Credit rating, International credit rating, Local credit rating, Tanzania, Tanzania commercial bank
Citation
Mwambe, A. K. (2020). Comparative analysis of local and international credit rating assessments of Tanzanian commercial banks (Master’s dissertations). The University of Dodoma, Dodoma.