The Effect of Liquidity Risk Management on the Bank Performance:  Evidence from Iraqi banks: Effect of Liquidity Risk Management on the Bank Performance

Sozyar Adil  Abdullah; Sumaia Sadiq  Ali; Naji Afrasyaw  Fatah

doi:10.63841/iue22528

Authors

Sozyar Adil Abdullah Sulaimani Polytechnic University, Technical College of Administration, Sulaymaniyah, IRAQ Author
Sumaia Sadiq Ali Sulaimani Polytechnic University, Technical College of Administration, Sulaymaniyah, IRAQ Author
Naji Afrasyaw Fatah Sulaimani Polytechnic University, Technical College of Administration, Sulaymaniyah, IRAQ Author https://orcid.org/0009-0002-1993-7832

DOI:

https://doi.org/10.63841/iue22528

Keywords:

Liquidity, Bank performance, ROA, and Sulaymaniyah city.

Abstract

The main objective of this paper is to study the effect of liquidity risk management on the profitability of commercial banks in Iraq during the time period (2020-2021). A descriptive survey design was adopted. The target is 4 private commercial banks listed on Iraqi Stock Exchange operating in Sulaymaniyah City. The liquidity indicator is the Liquidity Ratio while return on assets (ROA) were the proxy for profitability. Therefore, the dependent variable is bank performance which is measured by return on asset (ROA) and the independent variable is the Liquidity Ratio.

The empirical results, show that an increase in the liquidity ratio of leads to an increase in profitability. Furthermore, the findings illustrate that liquidity risk has a positive significant association with bank profitability.

The researchers recommend, that there is a need for optimum utilization of the available liquidity in various aspects of investment in order to increase the banks' profitability, and banks should adopt a general framework of liquidity management to assure sufficient liquidity for executing their operations more efficiently, and they should initiate an analytical study of the evolution rates of liquidity and their ability to achieve a balance between sources and uses of funds.

Author Biographies

Sozyar Adil Abdullah, Sulaimani Polytechnic University, Technical College of Administration, Sulaymaniyah, IRAQ

Sozyar Adil Abdullah I am a [ Accountant & Bachelor’s degree holder in accounting] at the Department of [Accounting], College of [Technical College of Administration], [Sulaymaniyah Polytechnic University] University. I got the B.Sc. degree in [ Accounting]. Our research interests are in Liquidity Risk Management, Bank Performance, and Financial Stability."
Sumaia Sadiq Ali, Sulaimani Polytechnic University, Technical College of Administration, Sulaymaniyah, IRAQ

I am a [ Accountant & Bachelor’s degree holder in accounting] at the Department of [Accounting], College of [Technical College of Administration], [Sulaymaniyah Polytechnic University]. I got the B.Sc. degree in [ Accounting]. Our research interests are in Liquidity Risk Management, Bank Performance, and Financial Stability." She is employee at a trading company.
Naji Afrasyaw Fatah, Sulaimani Polytechnic University, Technical College of Administration, Sulaymaniyah, IRAQ

He is a [Lecturer] at the Department of [Accounting], [Technical College of Administration], Sulaymaniyah Polytechnic University]. He got the B.Sc. degree in [Accounting], the M.Sc. degree in [Banking and Accounting] and now he is Ph.D. student in [Financial Accounting]. His research interests are in Liquidity Risk Management, Bank Performance, and Financial Stability. He is a finance advisor and researcher.

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