The financial implications of CSR: A study of the Impact of corporate social responsibilities on ROI and ROA within the banking industry

Abstract

The purpose of this study is to understand how Corporate Social Responsibility (CSR) effects the financial performance of banks. More detail is provided on spending and return for CSR, i.e. Return on Investment (ROI) and Return on Assets (ROA). In the banking sector, CSR is indispensable. This is because it builds customer confidence, loyalty and stakeholder relationships which eventually directly affect the financial performance of banks. By analyzing bank financial statements from 2018-2022, it is found that there is a significant relation between CSR activities and financial measures. CSR activity, on the whole, also makes a tangible contribution. Improved CSR frameworks will entail higher returns. CSR is not just a duty, but a lasting investment in the whole. Future work should focus more specifically on the strategic timing, methods and probable effects of such CSR activities.