The effect of credit and capital risk on stock returns An analytical study of a sample of banks provided in the Iraq

To the Council of the College of Administration and Economics / Karbala University, which is part of the requirements for obtaining a higher diploma in Banking Management in Banking and Financial Sciences
Research submitted by the student
Noura Obaid Nasser Al-Taie
Supervisor
A.M. Dr. Zaineb Makki Albanaa

Abstract
This research focused on one of the important topics in banks ‘financial and economic studies, which is the effect of credit risk, which is the risk that occurs as a result of borrowers’ failure to repay in the period specified for them by the bank on stock returns, and also the subject of capital risk, which is the risk that resulted from default or Failure to direct the capital owned to the areas that require coverage for financial obligations, as they are represented by capital risks, which may reflect this risk directly on investments and thus their impact on equity returns, as this research was relied on risk indicators For credit which is (the ratio of loans to deposits, the ratio of provision for loan losses to loans and advances, the ratio of loans and advances to total assets) as well as indicators of capital adequacy which is (the ratio of the capital owned to deposits, the ratio of the capital owned to the assets). On a set of analyzes and statistical tests, using the programs (Excel, Spss), this research focused on the monthly data of five commercial banks in the Iraq Stock Exchange (Baghdad Bank, the Al-Ahli Iraqi Bank, the Iraqi Investment Bank, Sumer Commercial Bank) for a period of 2005-2018 has It was adopted for the purpose of analyzing credit risks by relying on indicators of credit risk and capital risk by relying on indicators of capital adequacy and also for calculating the returns of private shares of these banks, this research has reached a set of conclusions, including (-The borrowers deficit and the lack of adequate guarantees by them This led to the banks ’tendency not to grant loans to them and thus this led to a lowering of the credit risk ratio. Also, most investors in stocks aim to achieve a return on capital through the high prices of ordinary shares invested with them, so investors work to search for the best opportunities E to sell ordinary shares at the highest possible price and thus the new investors aim to invest in the shares and buy them at the lowest possible price while some investors aim to achieve revenue returns by keeping the shares and waiting Dividend distributions by the company issuing these shares. (As for the most important recommendations of this research are) the necessity of diversification in funding sources in light of the rapid technological developments in the movement of the stock market and this is of great impact as the diversity in investments and its tools and this is most of what is followed from Before international banks, as it leads to reducing the risk to which the bank is exposed, whether it is credit or capital risk .