The mediating role of risk management practices on the relationship between banking risks and Iraqi banks financial performance
Iraqi private banks' approach to risk management profoundly influences their success and growth trajectory. Leveraging modern technology enables them to efficiently navigate intricate services and processes, optimizing their operations. However, the banking landscape is increasingly being chal...
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| Format: | Thesis |
| Language: | English English |
| Published: |
2024
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| Online Access: | http://eprints.utem.edu.my/id/eprint/28220/1/The%20mediating%20role%20of%20risk%20management%20practices%20on%20the%20relationship%20between%20banking%20risks%20and%20Iraqi%20banks%20financial%20performance.pdf http://eprints.utem.edu.my/id/eprint/28220/2/The%20mediating%20role%20of%20risk%20management%20practices%20on%20the%20relationship%20between%20banking%20risks%20and%20Iraqi%20banks%20financial%20performance.pdf |
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| Summary: | Iraqi private banks' approach to risk management profoundly influences their success and growth trajectory. Leveraging modern technology enables them to efficiently navigate
intricate services and processes, optimizing their operations. However, the banking landscape is increasingly being challenged by heightened financial risks, including stringent
governmental and legal constraints, coupled with global and domestic economic upheavals. These challenges can lead to a dip in profitability. Hence, for sustained financial performance, it's imperative for Iraqi banks to adopt risk management strategies tailored to the specific financial challenges posed by the evolving business environment. This research aims to investigate the influence of banking risk management practices on the financial performance of Iraqi banks. This study follows the cross-sectional time horizon. The data obtained from 99 individuals working in Iraqi private banks. Utilizing Partial Least Squares-Structural Equation Modelling (PLS-SEM), this study analyzed the relationships between banking risks, risk management practices, and financial performance. Bootstrapping was employed to assess the significance of path coefficients, ensuring the robustness of findings. The study found a significant relationship between banking risks and financial performance. Banking risks displayed a profound impact on risk management practices, which in turn significantly influenced financial performance. Moreover, risk management practices played a mediating role between banking risks and financial performance, showcasing the criticality of adopting comprehensive risk management strategies for improved financial outcomes. The findings reinforced various theories, notably the financial economic theory, stakeholders theory, and enterprise risk management theory. It illustrated how rational financial decision making, a commitment to a broader stakeholder base, and a holistic approach to risk management converge to influence financial outcomes in banks. The research underscores the importance of sound risk management practices for maximizing bank returns, elevating financial performance, and evading potential financial downturns. By providing a model that evaluates the influence of various risk facets, from credit to liquidity challenges, the study offers a roadmap for Iraqi banks to navigate the intricate world of financial risks, ensuring stability and growth. Effective risk management practices are paramount for enhancing the financial performance of Iraqi banks. A proactive approach to identifying, monitoring, and mitigating risks, combined with a commitment to stakeholders and strategic decision making, can lead to robust financial growth and stability in the banking sector. |
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