Analysis of banking investments and its impact on the market value through financial safety indicators

Analytical study of a sample of Iraqi private banks listed in the Iraqi Stock Exchange for the period (2004-2020)

From
Shayma Hadi Neimmah Al-Khafaji

Supervised by

Professor Dr.                    Assistant Professor Dr.
                                         

Haider Younes Mousawi             Kamal Jawad Al-Shammari

Abstract
The study sought to analyze the nature of the investments of commercial banks, in which loans constitute the most attractive investment areas, as well as investing in financial instruments, and then determining the extent to which the management of these investments contributes to the direction of financial safety indicators and thus enhancing the market value of the bank. Therefore, the study relied on the annual financial statements published on the Securities Commission website for a sample of seven commercial banks listed in the Iraqi Stock Exchange (the Commercial Bank of Iraq, the Investment Bank of Iraq, the Credit Bank of Iraq, the Iraqi klej Bank, the National Bank of Iraq, the Middle East Bank and the North Bank for Finance and Investment) and included a time series that extended for seventeen years (2004-2020), The study used multiple regression analysis for the purpose of testing the multiple direct impact relationships between the dimensions of the independent variable (banking investment) represented by investment in securities, investment in loans and advances and the dependent variable (market value). And then testing the multiple direct impact relationships between the dimensions of the independent variable (banking investment) with financial safety indicators (capital adequacy, liquidity, asset quality, profitability), and then testing the financial safety indicators as independent variables in the dependent
variable (market value). And that is through the use of programs (SPSSV23, Excel). Then the mediating role of the financial safety indicators variable was tested using the (Baron & Kenny) method, which is one of the common methods for testing the direct and indirect effects of the independent variable on the dependent variable with the presence of a mediating variable. The study also reached a set of conclusions that showed that banking investments directly and indirectly affect the indicators of financial safety and the market value in some of the sample banks. The study found the need to increase the interest of Iraqi banks in managing their investments in a manner that balances profitability and liquidity and enhances the bank’s market value.