USING THE BALANCED SCORECARD TO ACCESS PERFORMANCE OF BANKS IN GHANA

Using Balanced Scorecard to assess performance of banks in Ghana Author: Abu Yahaya Supervisor: Eva Lovstal Department: School of Management, Blekinge Institute of Technology Course: Master’s thesis in Business Administration, 15 credits (ECTS). Background and Problem Discussion: The effect of non-financial variables on the financial performance of banks in Ghana can become significant. The information of how customer satisfaction, internal business processes, organizational learning and growth influences financial indicators is therefore of great importance in assessing performance of banks in Ghana. Purpose: The purpose of this thesis is to create a model to be able to assess performance of banks in several dimensions and measures using the Balanced Scorecard framework. Method: Quantitative and inductive methods. Primary data is financial and non-financial statistics collected from public institutions and sources, staffs and customers of Barclays Bank Ghana limited, Ecobank Ghana Limited and United Bank for Africa (Ghana) Limited. Theory: The theory section looks at different concepts and relevant theories that come up when analyzing bank’s financial results and how they are being impacted by other non-financial perspectives. I have therefore chosen the most common concept for the theory section. Analysis: I have used a model to examine how the balanced scorecard can be used to assess performance of banks in several dimensions and measures in order to provide additional information to all stakeholders - internally and externally. The chosen scenario shall then be used to determine if BSC can provide additional information with respect to the performance of the selected banks. Conclusion: The analyzed banks showed only marginally the impact of non-financial perspectives on financial performance. Analysis also showed that in assessing performance of banks some critical non-financial factors such as customer satisfaction, efficient internal processes and the quality of staff play a crucial role. Of specific interest is the turn-around-time on loan processing and disbursement which is a core function of the banks and for which all the selected banks failed to adequately address. But the study also revealed that the BSC framework indeed provides additional information when used to assess the performance of banks in Ghana.