The objective of this study was to determine the relationship
between credit risk management and financial market indicators. The study problem
is summarized as follows: Do credit risk management indicators affect financial
market indicators in private banks? The study relied on two basic hypotheses:
the existence of a significant and significant correlation and effect
relationship between credit risk management and financial market indicators.
The sample of the study was a sample of private commercial banks in Iraq
consisting of eight banks. The required information was obtained through the
annual reports of the sample banks, as well as through the official
publications of the Iraqi Stock Exchange for the period (2007-2016). The study
used the program (Microsoft Excel 2013) in addition to the statistical methods
found in the statistical program (SPSS V.23), and the importance of the study
that it emerged out of the intellectual basis of the nature of the variables of
the study based on the practical reality of the variables and the ability of
these variables to achieve the goals.The
study reached a number of conclusions, the most prominent of which was the
existence of a difference between the banks in the relationship of correlation
and impact between the variables of the study, and the study also reached a set
of recommendations and suggestions.
References
[1]
Abdul Rahman, A. A. A. (2017). The Relationship between Solvency Ratios and Profitability Ratios: Analytical Study in Food Industrial Companies Listed in Amman Bursa. International Journal of Economics and Financial Issues, 7.
[2]
Abu Kamal, M. A. (2007). Modern Credit Risk Management in Banks According to Basel II International Standards. Master of Business Administration, Gaza: Islamic University.
[3]
Ajayi, L. B., & Ajayi, F. I. (2017). Effects of Credit Risk Management on Performance of Deposit Money Banks in Nigeria. International Journal of Research in Management & Business Studies, 4, 50-55.
[4]
Alexandra, W.-T. (2014). The P/E Ratio and Profitability. Journal of Business & Economics Research, 12.
[5]
Al-Lozi, K. M. (2013). The Effect of Profit Management Practice on Stock Prices—A Test Study on Industrial Companies Listed on the Amman Stock Exchange. Master of Accounting, Middle East University.
[6]
Almaududi, S. (2016). Eva (Economic Value Added) Dan Mva (Market Value Added) Serta Pengaruhnya Terhadap Nilai Perusahaan. Jurnal Ilmiah Universitas Batanghari Jambi, 16, 102-114.
[7]
Aloy Niresh, J., & Alfred, M. (2014). The Association between Economic Value Added, Market Value Added and Leverage. International Journal of Business and Management, 9.
[8]
Al-Shubiri, F. N. (2012). Debt Ratio Analysis and Firm Investment: Evidence from Jordan. International Journal of Economics and Financial Issues, 2, 21-26.
[9]
Al-Zubaidi, H. M. (2000). Banking Management Strategy for Filling Deposits and Provision of Credit. Amman: Al-Warraq Foundation.
[10]
Ansah, A. Y. (2013). Comparative Analysis of Statistical Models in Credit Assessment. Thesis, Legon: The School of Research and Graduate Studies of the University of Ghana.
[11]
Asha, S. (2013). Credit Management in Indian Commercial Banks. International Journal of Marketing, Financial Services & Management Research, 2, 47-51.
[12]
Bagchi, S. K. (2004). Credit Risk Management. Mumbai: TAICO Publishing House.
[13]
Basel Committee (2000). Principles for Management of Credit Risk.
[14]
Bergendorff, I., & Osback, M. (2017). Banking Soundness in Europe—The Impact of the Capital Requirements Regulation. Master Thesis.
[15]
Bhattarai, Y. R. (2016). Effect of Credit Risk on the Performance of Nepalese Commercial Banks. Kirtipur: Tribhuvan University.
[16]
Bjorkholm, J., & Johansson, V. (2015). Debt versus Equity—In a Low Interest Rate Environment. Master Thesis, Växjö: Linnaeus University.
[17]
Culp, C. L. (2000). RAROC Revisited. Journal of Lending & Credit Risk Management.
[18]
Dhani, R., & Hersugondo, H. (2016). Does Economic Value Added Influence the Shareholder Value in Indonesia? International Journal of Applied Business and Economic Research, 14, 1547-1560.
[19]
Edwards, B. (2004). Credit Management Handbook. Hants: Gower Publishing Limited.
[20]
Everett, P. (2015). Using Economic Capital to Manage a Bank and beyond. The Actuaries Institute.
[21]
Fight, A. (2004). Understanding International Banking Risk. Chichester: Wiley. https://doi.org/10.1002/9781118673294
[22]
Gestel, T. V., & Baesens, B. (2009). Credit Risk Management Basic Concepts. New York: Oxford University Press Inc.
[23]
Hasnawi, S. S. R. (2007). Determinants of the Rate of Return on Investment in Shares of Companies Participating in the Iraqi Market for Securities. Journal of the Axis of Financial and Banking Sciences Qadisiyah for Administrative and Economic Sciences, 9.
[24]
Hosna, A., Manzura, B., & Sun, J. (2009). Credit Risk Management and Profitability in Commercial Banks in Sweden. Master of Science in Accounting, Graduate School.
[25]
Hull, J. (2010). Risk Management and Financial Institutions (2nd ed.). Boston: Pearson Education.
[26]
Islam, Md. R., Khan, T. R., Choudhury, T. T., & Adnan, A. M. (2014). How Earning per Share (EPS) Affects on Share Price and Firm Value. European Journal of Business and Management, 6, 97-108.
[27]
Kagoyire, A., & Shukla, J. (2016). Effect of Credit Management on Performance of Commercial Banks in Rwanda (A Case Study of Equity Bank Rwanda LTD). International Journal of Business and Management Review, 4, 1-12.
[28]
Kamar, K. (2017). Analysis of the Effect of Return on Equity (Roe) and Debt to Equity Ratio (Der) on Stock Price on Cement Industry Listed in Indonesia Stock Exchange (Idx) in the Year of 2011-2015. IOSR Journal of Business and Management, 19, 66-76. https://doi.org/10.9790/487X-1905036676
[29]
Khan, S., Chauhan, V., Chandra, B., & Goswami, S. (2012). Measurement of Value Creation Vis-A-Vis EVA: Analysis of Select BSE Companies. Pacific Business Review International, 5, 114-131.
[30]
Khatywa, T. (2009). Mathematical Models of Credit Management and Credit Derivatives. Cape Town: University of the Western Cape.
[31]
Kumar, P. (2017). Impact of Earning per Share and Price Earnings Ratio on Market Price of Share: A Study on Auto Sector in India. International Journal of Research— GRANTHAALAYAH, 5, 113-118.
[32]
Lawrence, J. G., & Chad, J. Z. (2012). Principles of Managerial Finance (13th ed.).
[33]
Meyer, P. G. (2005). The Determinants of Credit Risk Mitigation in Lending to Black Economic Empowerment (BEE) Companies, from a Banker’s Perspective. Business Leadership University of South Africa.
[34]
Mulugeta, T. (2016). A Comparative Study on the Financial Performance of Commercial Banks in Ethiopia—An Application of Camel Model. MSc Thesis, Addis Ababa: Addis Ababa University.
[35]
Naima, K. (2009). Risk Management of Banking-Comparative Study between Traditional and Islamic Banks. The Requirements of the Master Degree in Economic Sciences, University of Mohamed Khiedr.
[36]
Nakhaei, H. (2016). Market Value Added and Traditional Accounting Criteria: Which Measure Is a Best Predictor of Stock Return in Malaysian Companies. Iranian Journal of Management Studies, 9, 433-455.
[37]
Naresh, C., & Rao, R. (2015). Credit Risk Management Practices of Indian Commercial Banks. International Journal of Marketing, Financial Services & Management Research, 3, 47-51.
[38]
Poorzamani, Z., & Otari, F. (2015). Information Content of Market Value-Added (MVA) and Cash Value-Added (CVA) vs. Accounting Profit to Assess Management Performance in The Companies Accepted in Tehran Stock Exchange. Indian Journal of Fundamental and Applied Life Sciences, 5, 185-193.
[39]
Rengasamy, D. (2014). Impact of Loan Deposit Ratio (LDR) on Profitability: Panel Evidence from Commercial Banks in Malaysia. Proceedings of the 3rd International Conference on Global Business, Economics, Finance and Social Sciences (pp. 1-18).
[40]
Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2013). Fundamentals of Corporate Finance (10th ed.). Dissertations & Thesis.
[41]
Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2016). Fundamentals of Corporate Finance (11th ed.).
[42]
Sareewiwatthana, P. (2014). PE Growth and Risk: Evidences from Value Investing in Thailand. Journal Technology and Investment, 5, 116-124. https://doi.org/10.4236/ti.2014.52012
[43]
Saunders, A., & Marcia, M. C. (2003). Financial Institutions Management: A Risk Management Approach (4th ed.). Boston: McGraw-Hill Companies.
[44]
Sayed, N. S., & Sayed, G. (2015). Indian Banking Sector: Measurement and Analysis of Market Value Added an Empirical Study in the Select Indian Banks. Great Lakes Herald, 9, 19-34.
[45]
Sezgin, F. H. (2010). An Empirical Investigation of the Relationship among P/E Ratio, Stock Return and Dividend Yield for Istanbul Stock Exchange. International Journal of Economics and Finance Studies, 2, 15-23.
[46]
Shanti, D., & Ottemoesoe, S. E. (2009). Market Value Added and Internet-Dependent Firms (Some Empirical Evidence from Asian Region). International Journal of the Computer, the Internet and Management, 17.
[47]
Smithson, C., & Hayt, G. (2001). Optimizing the Allocation of Capital. The RAM Journal, 67-72.
[48]
Song, Q. H., & Li, Z. H. (2008). Financial Risk Management. Beijing: China Financial Publishing House.
[49]
Srinivasan, G. U., Veerakumar, K., & Balachandran, S. (2012). Economic Value Added and Market Value Added of Private Steel Companies. International Journal of Social Science & Management, 2.
[50]
Talamati, M. R., & Pangemanan, S. S. (2015). The Effect of Earnings per Share (EPS) & Return on Equity (ROE) on Stock Price of Banking Company Listed in Indonesia Stock Exchange (IDX) 2010-2014. Journal EMBA, 3, 1086-1094.
[51]
Tarko, W. (2015). The Impact of Non-Performing Loans on Banks Profitability in Case of Dashen Bank S.C.
[52]
Teka, B. (2012). The Credit Risk Management Skills Shortage in Nelson Mandela Bay Metropole. Port Elizabeth: Nelson Mandela Metropolitan University (NMMU) Business School.
[53]
Tsumake, G. K. (2016). What Are the Determinants of Non-Performing Loans in Botswana? Cape Town: University of Cape Town.
[54]
Tugas, F. C., CISA, & CPA (2012). A Comparative Analysis of the Financial Ratios of Listed Firms Belonging to the Education Subsector in the Philippines for the Years 2009-2011. International Journal of Business and Social Science, 3, 173-190.
[55]
Ulzanah, A. A., & Murtaqi, I. (2015). The Impact of Earnings per Share, Debt to Equity Ratio, and Current Ratio towards the Profitability of Companies Listed in LQ45 from 2009 to 2013. Journal of Business and Management, 4, 18-27.
[56]
Van Benthem, C. S. (2017). The Relation among Non-Performing Loans, Operating Efficiency, and Capitalization in Commercial Banking. Enschede: University of Twente.
[57]
Wanjiku, K. R. (2015). Credit Risk Management Strategies and Performance of Standard Chartered Bank, Kenya. Nairobi: University of Nairobi.
[58]
Westgaard, S., & Wijst, N. (2001). Default Probabilities in a Corporate Bank Portfolio: A Logistic Model Approach. European Journal of Operational Research, 135, 338-349. https://doi.org/10.1016/S0377-2217(01)00045-5
[59]
Wibowo, P. P., & Berasategui, R. G. (2008). The Relationship between Economic Value Added (EVA®) and Market Value Added (MVA) with Reported Earnings: An Empirical Research of 40 Listed Companies in Indonesia Stock Exchange for the Year 2004-2007. Journal of Applied Finance and Accounting, 1, 60-72.
[60]
Yves, M. (2016). Effects of Debt Financing on Business Performance. A Comparative Study between I&M Bank and Bank of Kigali in Rwanda. 2010-2015. Kigali: University of Lay Adventists of Kigali.
[61]
Zewdu, A. M. (2016). Performance of Private Commercial Banks in Ethiopia, Pre and Post NBE Bill Periods. Addis Ababa: Addis Ababa University, Department of Management, College of Business and Economics.