Merger approach as an option to enhancing the capabilities of stumbling banks: an applied study of the banks listed in the Iraqi Stock Exchange

Abstract

This research deals with the banking merger for treating the reality of troubled banks in Iraq, especially after the central bank decision in 2019 to encourage the banking mergers. The research aims to introduce the conceptual framework about the merger and troubled bank, and logistic regression model, and the practical study that contains a sample of special commercial banks in the Iraqi stock market. The main hypothesis of the research is: (Encourages of the mergers processes between the Iraqi banks have positive effects on the improving the performance efficiency of the troubled banks). That is contributing to the expanding the financial inclusion and big spread for the bank's branches, and raise the financial indicators and improving the levels of liquidity and profits for the new entity bank. The banking merger represents the best tool to contain the banking troubles and problems, the main goals of the research represents in determining the financial indicators that may be used in determining the trouble banks that are certificated to the merger. Besides determining the trouble banks that is possible to merge according to its financial indicators by using the logistic regression. The research concluded some conclusions, first of them is the merger is one of the main the least expensive tools for restructuring for treating the trouble bank problems. The research recommended the formation of a higher committee by central banks in Iraq to treat the modes of trouble bank and supervising the merger processes in these banks.