Managing Earnings sensitivity and its impact in the economic value of the bank Through his financial performance
An analytical study of a sample of private Iraqi banks listed on the Iraq Stock Exchange for the period from (2005-2017)
A Thesis Submitted To
The Council of the College of Administration and Economics
University of Karbala
As Partial Fulfillment of the Requirement for the PH.D
As Partial Fulfillment of the Requirement for the PH.D Degree
In Financial and Banking Sciences
By
Mohammad Hashim Rbat
Under The Supervision
Ass. Prof. Dr. Dr. Ali Ahmed faris
Ass. Prof. Dr. Dr. Ahmed Kazem
Abstract
The aim of this study was to highlight one of the important influences on banking activity, which is the risks related to interest rate changes as they play an essential role in the subject of investment Thus affecting the value of the money whether in the form of assets or bank liabilities and how to deal with this type of risk for the purpose of maintaining the bank’s integrity where the management of the sensitivity of the barrage became
an important part of the banks in the management of funds during recent years as a result of unexpected changes in interest rates in Market
The study was based on the applied aspect of the published financial reports and statements of a group of commercial banks listed on the Iraqi Stock Exchange, which were selected based on the availability of data for the duration of the study (2005-2017) and used a range of financial indicators. The gap indicators, the term gap, the net interest margin, the financial performance indicators of the return on assets, the return on
equity and Cash balance ratio and trading ratio and the statistical programs using the Excel, spss and amos.
The study came out with a series of conclusions, the most important of which is that changes in interest rates affect the values of assets and liabilities in the bank’s balance sheet and thus affect the value of the bank and Balance sheet management is a key factor in ensuring the bank’s business and continuity and is a mechanism for addressing the risks faced by the bank due to the lack of matching of assets and liabilities due to
liquidity or changes in interest rates.
The recommendations of this study came the need for banks to study the balance sheet paragraphs to determine the sensitivity in all the paragraphs of assets and liabilities for the fluctuation of the interest rate and determine the value of the gap for the balance sheet and the extent of the impact on the net interest margin and banks in particular to make great efforts To face all types of risk and to have a comprehensive risk management strategy without affecting the bank’s capital, thereby improving the bank’s financial performance .
