Assets and liabilities Gap management and its impact on profitability in the commercial banks

A Thesis Submitted To

The Council of the College of Administration and Economics University of Karbala

As Partial Fulfillment of the Requirement for the Master Degree In Financial and Banking Sciences

By

Mohammad Hashim
Supervised By

Assistant professor, Dr. Ahmed Kazem

Abstract The world for financial institutions has changed during the last 20 years, and become riskier and more competitive. After the deregulation of the financial market, This prompted expenses to do everything they can to cope with risk in order to earn sufficient returns. Increase the interest rate fluctuations dramatically require efficient management in the interest rate risk management. banks developed a variety of methods for measuring and managing interest rate risk. Interest rate gap management has become an increasingly important part of bank funds management over the past decade. The gap in standards used by the bank to the statement of net interest margin, that is, interest income less interest expense, to unexpected changes in market interest rates. gap management process bank management both assets and liabilities, on the balance sheet according to interest rate sensitivity. For this study to shed light came on one of the important influences on the overall activity of banks, which risks related to changes in the interest rate as playing an essential role in the investment theme as a result will effect the value of assets, liabilities or banks, How to deal with this kind of risk in order to preserve the value of the bank. The purpose achieve the goals of the study It was selected gap model from which to measure the effect of the time factor on the values of assets and liabilities And thus take the necessary treatments to maintain the bank’s dividend, which seeks all banks to maintain it from all aspects of risk. The study presents a set of conclusions that the most important changes in interest rates affect the values of assets and liabilities and thus affect the value of the bank These were the recommendations of this study, the first two aspects General recommendations include all banking sectors while the second dealt with the recommendations on a sample study based on what brought him the results of the analysis.