The Impact Of Capital Risks On The Profitability Of Private Libyan Commercial Banks During The Period From 2008 To 2021

Abstract

The study aims to state the impact of capital risks (capital adequacy ratio to assets, capital adequacy ratio to risky assets) on the profitability rate of return on property rights of private Libyan commercial banks (Amman, Al United, and Al Sarai) during the period from 2008 to 2020.The study utilized the analytical-descriptive approach by referring to the banks financial statements subject to the study. The SPSS statistical program was used to measure the impact of simple and multiple regressions of the variables to test the assumptions and reach outcomes and recommendations. The study found that there is a statistical significance related to the impact of capital risks on the ratio of returns on assets as well as the impact of capital risks on the rate of return on owner's equity. The study also illustrates, based on analyzing the banks ‘financial statements subject of study, that when the capital of commercial banks increased, the capital adequacy increased. This allowed opportunities and the ability to expand in granting loans, funding, and achieving more returns. In addition, there is a decrease in the rate of the realized return despite the availability of excessive funds.