Analysis of the impact of some banking risks on the profitability of a sample of Iraqi banks listed on the Iraq Stock Exchange for the period (2011-2020)

Section: Research Paper
Published
Dec 1, 2025
Pages
65-87

Abstract

Profitability is one of the important indicators that stakeholders resort to to judge the extent of the bank's success in managing its resources, which are affected by a group of banking risks. Therefore, the research aims to find the relationship between a group of banking risks (liquidity risk, credit risk, capital adequacy risk) and the bank's profitability for a sample of banks listed on the Iraq Stock Exchange for the period (2011-2020). Through the financial statements data of the research sample and based on financial analysis, all study variables were measured. As for the dependent variable, which is the profitability of banks, it was measured through the return on equity index. As for the first independent variable (liquidity risk), it was measured through the cash index to the total current liabilities. Credit risk was measured through the size of the loans provided by the bank to its customers to the total assets. As for the last independent variable, which is capital adequacy risk, it was measured by dividing equity to total assets. The research concluded that there is a statistically significant relationship between (liquidity risk, credit risk, capital adequacy risk) and the bank's profitability. For a sample of banks listed in the Iraq Stock Exchange, the explanatory variables of the model (liquidity risk, credit risk, and capital adequacy risk) affect the return on equity by 32%, as the relationship between each of the liquidity index and the return on equity was directly proportional, meaning that the banks in the research sample maintained good liquidity, which helped them increase profits, as well as for the credit index, as the statistical relationship with the dependent variable was directly proportional, while for capital adequacy risk, it has an inverse effect on the return on equity.

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How to Cite

Saeed, A. K. . (2025). Analysis of the impact of some banking risks on the profitability of a sample of Iraqi banks listed on the Iraq Stock Exchange for the period (2011-2020). TANMIYAT AL-RAFIDAIN, 44(148), 65–87. https://doi.org/10.33899/tanra.v44i148.54138
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