Analysis Of Banking Risk And Its Reflection On Capital Adequacy Using The Altman Model (Applied study in a sample of banks listed in the Iraqi market securities for the period from 2005 to 2017)

Abstract

The banking sector is the main pillar of the financial system in any country as a result of its effective role in developing the economy of the country by obtaining funds from individuals and investing in various fields. The most important source depends on banks, as well as other sources such as deposits. The Bank is in a situation of crisis due to its banking business, which is represented by various banking risks. Therefore, it works hard to face any risks that arise through its involvement in the sources of financing and diversifying its investments to reduce the risk level. Therefore, the researcher analyzed the banking risk by using the Altman scale as well as analyzing the capital owned by analyzing the special indicators. Hence, the problem of research started to define modern measures linking the banking risk and capital adequacy. The sample included (11) banks represented in (Baghdad, Babel, Sumer, Middle East, Business Bay, Commercial Bank of Iraq, Credit, Al Ahli, Iraqi Investment, United Bank, Mosul Development and Investment) based on the availability of data for a time series from 2005-2017. The study used a variety of financial and statistical means to achieve its objectives. Used to check the Tu The results of the study were found to be subject to normal distribution, and a range of statistical methods were used, such as Pearson and linear regression, using the application of SPSS. With significant statistical significance between banking risk and capital adequacy. The study presented a number of recommendations, the most important of which is the need for the management of banks to use modern measures such as the Altman model to determine the capital needed to face the expected risks.