THE EFFECT OF CREDIT RISK IN THE CREDIT CAPACITY AN ANALYTICAL STUDY OF A SAMPLE OF BANKS LISTED ON THE IRAQ STOCK EXCHANGE FOR THE PERIOD (2011-2020)

Abstract

The aim of the research is to show the impact of credit risks, which vary in degree of severity from one bank to another, according to the nature of the activity practiced by the bank, on the credit capacity of a sample of banks listed in the Iraq Stock Exchange, as the research community is represented in the Iraq Stock Exchange, while the research sample is represented by (10) banks listed on the Iraq Stock Exchange represented by (Commercial bank of Iraq, Bank of Baghdad, Middle East Bank, Iraqi Investment Bank, United Investment Bank, National Bank of Iraq, Sumer Commercial Bank, Khaleej Commercial Bank, Ashur International Bank, Mansour Bank investment) for the period (2011-2020), and the independent variable was represented by credit risk, while the dependent variable was represented by credit capacity indicators, which are the non-performing loans index to total loans, the loan loss allowance index, and to analyze and test the research hypotheses, the statistical program SPSS was used to identify the correlation and impact relationships between the research variables through tests (F, T, R2), and the research reached a set of conclusions, the most important of which was that the analysis of the relationship between credit risk and its impact on indicators of credit ability showed the existence of a direct and significant correlation, as the higher the credit risk, the more credit ability indicators were affected by the increase, and vice versa the research also recommended the necessity of emphasizing that the bank's credit department adopts a moderate credit policy that works to achieve a balance between the profits that the bank seeks to achieve by investing depositors' money in the form of loans and the risks that the bank may be exposed to as a result of investing that money.