Abstract:
Drivers of financial performance are very critical in the development, survival, sustainability,
growth and performance of commercial banks. The study aim was to determine the drivers of
financial performance of both local and foreign commercial banks in Tanzania. This study
sought to; determine the capital risk effect on financial performance, the effect of corporate
social responsibility on financial performance and to find out the effect of regulatory supervision
on financial stability of the commercial banks. In this study a total of 34 respondents were
targeted. In addition, the research design employed was case study design. Documentary
review was utilized to collect data. Data was analysed using the Statistical Program for Social
Science (SPSS) software version 20 and STATA version 14. In addition to tables, figures were
used to present data. The study established that capital risk, corporate social responsibility and
regulatory supervision are mostly responsible for the financial performance and stability of
commercial banks. The commercial banks should regulatory guidelines to make financial
decisions. Additionally, commercial banks ought to target on boosting the banks’ capital levels
with the aim of improving their financial performance. In this way, the banks will be capable of
exogenous shocks and have the potential to seize business opportunities as they arise
consequently boosting their financial performance
