CONTROL ENVIRONMENT AND PERFORMANCE OF GUARANTY TRUST BANK, MBARARA, BRANCH, UGANDA

Abstract

In the recent past there has been failure of some commercial banks in Uganda. This trend puts into question 
the ability of the internal control environment and the Bank of Uganda prudential guidelines to steer the 
commercial banks stability and performance. However, the recent failures have put pressure on the industry 
regulators and players to rethink how best the institutions can align their internal control environment and 
compliance as tools of ensuring stability and positive performance. The study sought to assess the 
relationship between internal control environment and  financial performance of Guaranty Trust Bank, 
Mbarara, Branch, Uganda.Both primary and secondary data was collected. Primary data was for 
Questionnaire feedback while secondary data was extracted from audited financial reports of Guaranty Trust 
bank using a case study of Mbarara branch. The research philosophy of the study is positivism. The study 
used a descriptive research design with census methods being used  
. Data was analyzed using SPSS package and descriptive, correlation and regression analysis were carried 
to establish relationships between the variables. The study findings established a positive and significant 
relationship between control environment and financial performance of the commercial banks. The study 
therefore recommends that there is need therefore for the banks to ensure suitable environment where 
internal controls are supported for the improved performance of the banks. There is need also for proper 
checks and balances in all financial transactions in the banks. The banks’ management should examine the 
level of employee integrity in allocating them responsibilities especially where employees are to deal with 
confidential information involving the banks’ vital documents.