The Impact of Banks' Profitability on the Market Value of Their Shares: A Comparative Study on a Sample of Banks Listed on the Iraq Stock Exchange for the Period (2016–2024)
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Abstract
This study aims to analyze the impact of bank profitability on the market value of their shares in the Iraq Stock Exchange, through an empirical study of three listed Iraqi banks: Bank of Baghdad, Gulf Commercial Bank, and Ashur International Investment Bank, during the period from 2016 to 2024. The study used three profitability indicators (return on assets (ROA), return on equity (ROE), Net profit to revenue ratio (NPR) was used as the independent variable, while the market value of the stock was considered the dependent variable. The study relied on a quantitative analytical approach by analyzing actual financial data and using the t-test to measure the significance of the relationship between the variables. The results showed a statistically significant positive relationship between profitability indicators and market value, indicating that profitability performance is a decisive factor in determining the market value of bank shares. The study concluded that improving the efficiency of financial resource utilization and achieving profitable returns enhances the attractiveness of bank shares in the market. It provides a reliable indicator for investors and decision-makers in assessing the financial position of banking institutions in Iraq. The study recommended improving profitability performance by maximizing return on assets and equity and reducing operating costs to increase net profit to revenue ratio, thereby enhancing the market value of shares.
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