RISKS HARING PARTNERSHIPS AND PERFOMANCE OF COMMERCIAL BANKS IN KENYA

Commercial banks operate in an increasingly uncertain financial environment characterized by credit, liquidity, operational, technological, and market risks. Strategic risk-sharing partnerships provide banks with mechanisms for distributing financial and operational risks among partner institutions, thereby strengthening resilience and organizational performance. This study examined the effect of risk-sharing partnerships on the performance of commercial banks in Kenya. The study was guided by Risk-Sharing Theory and supported by Dynamic Capabilities Theory. A positivist research philosophy and cross-sectional research design were adopted. Quantitative data were collected from 130 respondents drawn from commercial banks in Kenya using structured questionnaires. Data were analyzed using descriptive and inferential statistics, including correlation and multiple regression analysis. The findings indicated that respondents strongly agreed that strategic partnerships facilitated the distribution of financial risks between partners (M = 4.33, SD = 0.57) and improved banks’ resilience to market uncertainties (M =4.27, SD = 0.73). Regression results established that risk-sharing partnerships had a positive and statistically significant effect on bank performance (β=0.417,t=13.058,p<.001). Risk sharing emerged as the strongest predictor among the strategic partnership dimensions examined. The findings demonstrate that collaborative risk-management mechanisms can reduce individual exposure to financial and operational uncertainties while strengthening bank resilience and performance. The study concludes that commercial banks can enhance their performance and sustainability by establishing structured risk-sharing arrangements with strategic partners. It recommends that banks strengthen partnership frameworks for syndicated lending, credit guarantees, co-financing, insurance, and other collaborative risk-management mechanisms.