The financing gap and its impact on the economic value of the bank through its financial performance
Analytical study in a sample of banks registered in the Iraqi Stock Exchange For the period (2005-2019)
To The Council of the College of Administration and Economics, Karbala University, in Partial Fulfillment of the Requirements for Master’s degree in Business Administration Department
by
Suhad Hussain Shyae
Supervised by
Prof.Dr. Ahmed Kazem
Abstract
The study sheds light on one of the important and influencing variables on banking activities, which is financing, which plays an important and fundamental role in the investment process and thus affects the value of assets and liabilities in the bank’s budget and the consequent impact on the economic value of the bank and how to deal with this type of variables in order to improve the value The economic bank. The study was based in its theoretical aspect on the Arab and foreign sources related to the subject of the study, and in its practical aspect it relied on data in the reports and financial statements published for a group of banks listed on the Iraq Stock Exchange that were selected depending on the availability of data for the period of the study (2005-2019) and the sample included ( 10) banks (Bank of Baghdad, Middle East Bank, Iraqi Investment Bank, Al Ahli Commercial Bank, Credit Bank of Iraq, Sumer Commercial Bank, Gulf Commercial Bank, Mosul Bank for Development and Investment, Commercial Bank of Iraq, United Bank) and a group of financial means were used And statistical data to achieve the study objectives, the pearson linear correlation coefficient was used, as well as simple linear regression and testing of direct effect relationships between the main study variables and the indirect effect between the study variables by using the AMOS and SPSS statistical program. The study used a set of indicators represented by the financing gap index (the financing gap ratio), financial performance indicators (rate of return on property rights, rate of return on assets, rate of return on deposits) and the economic value of the bank. After analyzing the data, the study reached a set of conclusions, the most important of which are: The change in the economic value of the bank affects the total value of the balance sheet, because the market value of the assets is affected by price changes in the net present value of future cash flows. The study recommended a set of recommendations, the most important of which are: The need for bank management to pay attention to the relationship between the financing gap and the economic value of the bank, through the bank management measuring the liquidity risks of banks and determining the funds that should be invested and the money they keep to face daily withdrawals. And the need for the bank to follow a good investment policy to invest its surplus money by managing its liquidity in a way that helps it achieve profits from these invested money, and to encourage banks to find new mechanisms and sound methods that enable them to better utilize the deposits available to them in order to achieve profits.
Key words – financing gap, financial performance, the economic value of the bank
