Nexus Between Covid-19 Pandemic, Liquidity and Profitability of Listed Banks in Tanzania

Abstract

This study intends to explore the relationship between COVID 19 pandemic, liquidity and profitability of selected listed banks at the Dar es Salaam Stock of exchange (DSE) in Tanzania. Causal comparative design (Ex post Facto Design) was fully applied in order to compare the profitability and liquidity of the listed banks at the DSE pre-COVID 19 period of quarter 1 and 2 of 2019 financial statements and post-COVID-19 period of quarter 1 and 2 of 2020. This was done to examine the impact of COVID-19 pandemic on liquidity and profitability of purposively selected two (2) listed banks at DSE. The statistical test of parameter estimates was conducted by Wilcoxon statistical test tool from SPSS-20 version where Liquidity position of the selected banks were analyzed based on comparison of cash position through the liquidity ratios of cash ratio and operating cash flow ratio in the pre-COVID-19 period of quarter 1 and 2 of 2019 financial statements and post-COVID-19 period of quarter 1 and 2 of 2020 and return of equity (ROE) was used as the measure of performance of the mentioned banks. The findings reveal that COVID-19 pandemic has significantly affected the liquidity and profitability position of two selected banks at DSE in Tanzania at 5% level o significance though the effect was not massive.