The Effect of Capital Adequacy According to the Requirements of the Basel Iii Committee on the Profitability of Commercial Banks an Applied Study on a Sample of Iraqi Private Banks

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The Effect of Capital Adequacy According to the Requirements of the Basel Iii Committee on the Profitability of Commercial Banks an Applied Study on a Sample of Iraqi Private Banks

Alaa Dashi Daghim, Mohamed Hassan Resham

Al-Muthanna University / College of Administration and Economics

Abstract

Research shows by discussion and analysis the topic “Effects of capital adequacy in accordance with the requirements of the Basel Committee III on the profitability of Commercial Banks ” and is an empirical study in banking (Middle East, Baghdad), for the period of the year (2006) and year (2015), framing theory about capital adequacy requirements for banks under the topics Basel Committee III, profitable banks, they use descriptive analytical, describe, analyze and measure the adequacy of capital of the banks, and the profitability of banks, The capital adequacy ratio was measured by dividing the total capital on risk weighted assets,, after measured and appreciation in research, while banks used to measure profitability indicator financial ratios (return on assets, return on equity, interest rate, net profit margin), by analyzing the financial statements of banks for research, and the availability of final accounts, balance sheets, financial reports, in order to assess and measure search variables, analysis of the relationship, and their impact, analysis of variance ANOVA was used for measuring the relationship and the impact between the results capital adequacy in accordance with the requirements of the Basel Committee III and the profitability indicator, This study and the results of the statistical analysis have found a correlation, with a negative statistical connotation, between capital adequacy and profitability in the Middle East bank, i.e., a rise in the ratio of capital adequacy to one unit leads to a decrease profitability (0.160), as well as proving the link relationship only in the bank of Baghdad, this proves the validity of the search hypothesis, which states that the adequacy of the capital banks are linked and significantly affected the profitability of the bank, while not proved that the hypothesis in the Bank of Baghdad relative to the relationship of the impact, because the sig’s moral value was greater than the level of morale (0.05), due to the existence of abnormal data in the bank data.

DOI:10.52113/6/2018-8-1/137-164

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