Measuring finance requirements and their role in improving the market value of the bank

Applied study in a sample of banks registered in the Iraqi Stock Exchange

For the period 2005-2017

by

Sheimaa shakir Mahmood Al Mayah

To The Council of the College of Administration and

Economics, Karbala University, in Partial Fulfillment of the

Requirements for Master’s degree in Finance and Banking

Supervised by of assistant professor
Dr. Zainab makee mahmood Albanaa

Abstract
          The study aims at identifying the importance of measuring the market value of banks, indicating the extent of their decline or volatility, as well as measuring financing requirements, which is one way of measuring the liquidity risk by determining the funding gap for banks. Liquidity risk is the inability of the Bank to meet its financing requirements. Liquidity risk may occur as a result of turbulence in the financial market, leading to a reduction in some sources of financing. The Bank has full responsibility to control these risks and minimize liquidity risk, thereby improving the Bank’s market value. In the study, the researcher relied on a set of reports and financial statements published for a group of banks listed in the Iraqi market for securities which were selected based on the availability of data for the period 2005-2017. The sample included 9 banks (Baghdad, Iraq, Middle East, Iraqi Investment, Iraqi National Bank, Credit, Sumer Commercial, Gulf Business, Mosul Development & Investment). The study used a set of financial and statistical means to achieve its objectives. The study was used to verify the normal distribution of data (Kolmogorov-Smirnov). The study also used the Pearson correlation coefficient as well as the simple linear regression and the test of the direct effect relationship between the main study variables and the indirect effect between the variables of the study Using SPSS and AMOSS. Several indicators were used to measure the variables: funding gap, financing requirements, ratio of financing to ownership, ratio of financing to deposits, ratio of financing to ordinary shares, ratio of financing to retained earnings, market value of the bank, book value and net worth.

       The study reached a number of conclusions, the most important of which is the existence of a significant correlation and correlation relationship between the financing requirements and the market value of the bank. The study presented a number of recommendations, the most important of which is the importance of the management of banks to the relationship between the financing requirements and the market value of the bank through the management of banks to measure the requirements of funding periodically and continuously for banks and determine the bank’s needs for funds.

Key terms / financing, sources of financing, liquidity risk (financing risk), financing gap, financing requirements, market value.