AN EMPIRICAL STUDY ON PRODUCTS PORTFOLIO PERFORMANCE AMONG COMMERCIAL BANKS IN GHANA: A RETURN ON INVESTMENT PERSPECTIVE

Practically, commercial banks deal with a wide range of products that make up their product portfolio. Knowledge about the performance of each product by management of commercial banks is relevant to effective portfolio management. This study assesses the relative performance of products that make up the product portfolio of commercial banks in Ghana. Secondary data on 20 commercial banks in Ghana which span a period of five years (2009-2013) were used. The Analysis of Variance and ordinary least squares regression analysis were used to test hypotheses. Lending as a product contributes the highest revenue to financial return among commercial banks, followed by investment. Deposits and consultancy come with the lowest contributions to financial returns. Also, all products significantly predict financial performance in terms of return on investment at 5% significance level, with lending contributing the highest variance of 87.6%, followed by investment products (63.2%). Though lending and investment make the largest effects on financial performance, deposits and consultancy also significantly influence financial performance in the commercial banks.