Factors affecting bank profitability: An application in Iraq

Banks are one of the most important economic structures that meet the money supply and demand and the credit needs of companies in an economic system. Due to these functions, banks are seen among the most important actors of a strong economic system and play an important role in the welfare level of the country in terms of macroeconomics. For this reason, it is of great economic importance to measure the performance of banks and to reveal the factors affecting this performance. In this study, the effect of financial ratios on the return on assets and return on equity in the economic activities of 14 Iraqi banks between the years 2015-2021 was analyzed with panel data regression. According to the results of the analysis, it has been determined that the asset and equity profitability of the banks in Iraq is affected by the asset size of the banks, the ratio of loans and receivables to the total assets, the share of deposits in total assets, the capital adequacy ratio, the ratio of interest income to interest expenses and liquid asset values.