Corporate Failure, Financial Performance, and Regulatory Oversight: Empirical Evidence from Financial Institutions Listed on the Lusaka Securities Exchange

Vincent Bwato, Dr. Norman Kamanga and Dr. Romeo Yohane
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Vincent Bwato: Institute of Distance Education, University of Zambia
Dr. Norman Kamanga: University of Zambia
Dr. Romeo Yohane: University of Zambia

African Journal of Commercial Studies, 2026, vol. 7, issue 1

Abstract: This study investigates corporate failure among financial service institutions listed on the Lusaka Securities Exchange (LUSE), examining the role of financial performance and regulatory oversight. The study data were collected from six (6) LUSE-listed financial institutions, namely, Zambia National Commercial Bank (Zanaco Bank Plc), Absa Bank Plc, Standard Chartered Bank Plc, Investrust Bank Plc, Madison Financial Services Plc, and Zambia Reinsurance Plc. The study finds that weak financial performance, inadequate governance, and regulatory non-compliance are significant predictors of corporate failure, exemplified by the collapse of Investrust Bank. Conversely, strong financial indicators, effective risk management, and robust regulatory oversight correlate with sustainable operations and firm value, as observed in Zanaco Plc and Standard Chartered Plc. The findings highlight the importance of proactive monitoring, risk-based regulation, and governance interventions to prevent financial distress. The study proposes a diagnostics model that will prevent financial institutions from failure using traffic-light early warning signals (red, amber, green).

Keywords: Corporate Failure; Financial Performance; Regulatory Oversight; Lusaka Securities Exchange; Financial Services Institutions (search for similar items in EconPapers)
JEL-codes: G21 G28 G33 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:ajocsk:2026-10

DOI: 10.59413/ajocs/v7.i1.10

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