The Impact of Corporate Social Responsibility on Financial Performance: The Case of Listed Banks on the Ghana Stock Exchange

Abstract

This study looked at the impact of Corporate Social Responsibility (CSR) on the performance of listed banks on the Ghana Stock Exchange. Secondary data was obtained from the financial statement of eight (8) banks over the past eleven years (2007 to 2017) to answer the research questions. Data were analyzed quantitatively with Return on Asset (RoA) and Return on Equity (RoE) as a measure of performance which was also the dependent variable and expenditure on CSR as an independent variable. Corporate Social Responsibility was insignificant but positively related to Return on Asset (RoA) where the same variable was negative and significantly related to Return on Equity (RoE). The study recommends that banks should be cautious in undertaking CSR. After all, it could be cautious in undertaking CSR because it could negatively affect their Return on Asset and Return on Equity. Also, it is recommended that most CSR projects should be weighted by the banks if possible and a cost-benefit is done even before deciding whether to go on with the project or not. Keywords: Banks, Capital Adequacy, Corporate Social Responsibility, Financial Performance, Socially Responsible Investment.