Credit risk and its impact in the profitability of the banking institution (Case study of the Kurdistan International Bank for Investment and Development)

Abstract

Risk is an integral part of banking, especially as competition, technological developments banking volumes and the need for banks to deal with a wide range of services are increasing. Therefore, banks are facing a variety of banking risks, which vary in severity from one bank to another. As banks are private enterprises that face different types of returns and risks, credit risk is one of the most important risks facing customers and institutions. The important role of banks in a country's economy and its direct impact in the investment environment Investors have tried to find more than one method for analyzing the credit risks that affect the Bank's achievement of its objectives. Profitability is one of those key objectives. Therefore, the study attempts to identify these risks that affect the profitability of the banking institution through the use of financial ratios over a specific time series from (2006) to (2015). The study reached a number of conclusions, the most prominent of which is that the unstable economic and political conditions experienced by the region currently affect the decline in profitability of the bank sample study, The study also recommended a study by the bank's management to follow up the continuous development of regulatory and banking controls to ensure good credit risk management, and to show the strength of the bank's credit risk. The impact on banking profitability, in addition to the financial globalization, which requires the bank surveyed to reconsider its operations in order to respond to new environmental factors, especially the environment of the region.&nbsp