The Impacts of Capital Structure on Bank Performance

A Case of Iraqi Private Banks

  • Sardar SH. Ibrahim Department of Accounting and Financial Techniques, Technical College of Administrative, Duhok Polytechnic University, Kurdistan Region. Iraq http://orcid.org/0000-0002-7519-2137

Abstract

Purpose: This study studies the effect of capital structure on the performance of some Iraqi private banks. Six banks based in Iraq namely: Babylon Bank, Investment Bank, Credit Bank, Commercial Bank, Sharq Al-Awsat Bank, and Baghdad Bank were selected for the present study over the period 2005 to 2015. Methodology: Annual reports of these banks were studied and relevant ratios were calculated. The variables that were identified as independent for capital structure were total debt to capital, bank size and asset growth, while return on assets and return on equity were considered to be dependent variables for bank performance. The panel Least Square model has been used to examine the impact of capital structure on bank performance. Findings:  Outcomes indicate that none of the independent variables has a significant impact on return on assets (ROA), while total debt to capital (TDC) has a positive impact on return on equity (ROE). Reduction: Depending on this result, Iraqi banks should keep sufficient amount of capital to avoid any financial risks and increase the probability of survival.

Author Biography

Sardar SH. Ibrahim, Department of Accounting and Financial Techniques, Technical College of Administrative, Duhok Polytechnic University, Kurdistan Region. Iraq

Sardar is an Assistant Lecturer of Banking and Finance in the Department of Accounting and Financial Techniques, where he has joined the work at Duhok Polytechnic University since 2016. Before that, he was a Researcher at Administrative technical college/ Duhok Polytechnic University.
He gained a B.Sc. degree in Banking and Finance Science from University of Duhok in 2010, M.Sc. degree in Banking and Finance Science fromUniversity of Leicester/ UK in 2015.

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Published
2019-06-20
How to Cite
IBRAHIM, Sardar SH.. The Impacts of Capital Structure on Bank Performance. Koya University Journal of Humanities and Social Sciences, [S.l.], v. 2, n. 1, p. 118-123, june 2019. ISSN 2522-3259. Available at: <http://jhss.koyauniversity.org/index.php/jhss/article/view/110>. Date accessed: 24 july 2019. doi: https://doi.org/10.14500/kujhss.v2n1y2019.pp118-123.
Section
Articles