FACTORS AFFECTING FIRM PERFORMANCE IN COMMERCIAL IRAQI BANKS

Abstract

The purpose of this paper is to investigate the effects of several potential factors on the performance of banks in the context of a developing country, Iraq. Profitability is one of the top priorities for banks and other businesses, as they can maintain and sustain their financial position, expand their equity, and improve their solvency and liquidity by achieving appropriate returns; thus, strengthening their ability to handle the risks and obligations they face. The study sample consists of 10 commercial banks listed on the Iraq Stock Exchange during the period 2009 -2020. The collected panel data were analyzed using Pooled Ordinary Least Square method. Bank performance is measured through the usage of ROA and ROE. The explanatory bank-specific variables are size, liquidity ratio, total loan to total asset, and bank age. The explanatory economic-specific factors are GDP, inflation rate, interest rate, and cash reserve rate. The results show that the considered explanatory variables affect bank performance with different levels of impact.