The Impact of Certain Financial Structure Indicators on Financial Efficiency and Their Reflection on Financial Balance: An Applied Study on a Sample of Iraqi Commercial Banks

Abstract

The study aims to determine the impact of certain financing structure indicators (reserves and retained earnings) on efficiency and its reflection on financial balance as represented by its indicators (profitability and activity). To achieve this objective, the study used content analysis of the annual financial statements published on the Iraq Stock Exchange website for banks. The study took five banks as a sample for the period from (2014 - 2023) to collect preliminary data for the purpose of measuring the study variables and dimensions. Correlation and regression models were used in the statistical program (SPSS) to examine the relationship and impact between these variables and dimensions. The study concluded that there is a significant and statistically significant impact of all dimensions of funding sources on the financial efficiency and financial balance of the banks in the study sample, and that the impact varied between negative and positive. The study recommended that Iraqi commercial banks invest their sources of financing in terms consistent with their maturities in order to achieve returns and improve profitability ratios in the banks in the study sample, and that they rank sources of financing in order to select the most beneficial and least costly source for the commercial bank. The study recommended that Iraqi commercial banks should invest financing sources in maturities that match their obligations to achieve returns and improve profitability ratios in the sampled banks. It also emphasized the need to prioritize financing sources to select the most beneficial and least costly option for commercial banks.