The Relationship between Capital Structure and Banking Risks and Their Impact on Iraqi commercial Banks' Profitability An Analytical Study on a Sample of Private Commercial Banks Listed on the Iraqi Stock Exchange for the period (2010-2021)

Abstract

The research aims to shed light on new facts to form a better picture of the capital structure and its relationship to the performance of banks in Iraq. This study is unique in that it determines the optimal structure for Iraqi banks and provides scientific evidence on measuring the relationship between capital structure and banking risks and their impact on profitability in commercial banks. The study was applied to a sample of ten Iraqi banks listed on the Iraq Stock Exchange for the period from (2010-2021). The study methodology was also based on the panel data method, and the statistical program EviewsV.9 was used to conduct an analysis of the correlation and influence relationship between the study variables. Four models were used to analyze the relationship between the study variables. The first model aims to measure the effect of capital structure on banking risks, the second model aims to measure the effect of capital structure on profitability, and the third model aims to measure the effect of banking risks on banks’ profitability, in The fourth model aims to measure the relationship between capital structure and banking risks and their impact on banks’ profitability. The results of the study indicated the existence of a negative, statistically significant relationship between capital structure and banking profitability, as well as the existence of a positive, statistically significant relationship between banking profitability and banking risks. The results also showed the existence of a negative, statistically significant relationship for banking risks in profitability, and the existence of a statistically significant relationship for capital structure. Money and banking risks in the profitability of banks. The results also proved that there is a statistically significant relationship between capital structure and banking risks. In light of the results, the study recommended the necessity of requiring banks to maintain the capital adequacy ratio and adopt modern methods and technologies to keep pace with developments and enhance their competitive position.