Impact of Capital Adequacy, Asset quality and Liquidity on the Continuity of Profits in Commercial Banks/Applied Research at Bank of Baghdad
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Abstract
This research aims to analyze and measure the impact of capital adequacy, asset quality and liquidity on the continuity of profits, as capital adequacy is a "protective line" that protects the bank from exposure to losses arising from business, whether inside or outside the bank's balance sheet, and the quality of the assets is a reflection of efficiency the bank's credit decisions, investment policies, and loan and advances practices that constitute a large part of the bank’s assets, and liquidity is important for the commercial bank because it measures the bank’s ability to pay all its commercial obligations in cash and respond to credit requests. These variables have an impact on the continuity of profits, which is one of the core objectives that the bank seeks to achieve. This research was applied in the Bank of Baghdad registered in the Iraq Stock Exchange for the period 2009-2018, the descriptive analytical approach was used in describing, measuring and analyzing all variables through the actual financial data available from the Bank of Baghdad, on the Iraq Stock Exchange website, for purpose of measuring and evaluating independent and dependent research variables, and analyzing the correlation and impact relationship between them, analysis of variance was used by using the program (SPSS) to measure the relationship and impact between capital adequacy, asset quality, liquidity and the continuity of profits.
This research reached a set of conclusions, the most important of which is that there is a significant statistical impact and correlation for all independent variables that are represented in the ratio of capital adequacy, asset quality, and liquidity, with the continuity of profits.
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