THE ROLE OF FINANCIAL ARCHITECTURE IN ENHANCING BANKING PERFORMANCE: A CASE STUDY OF THE BANK OF BABYLON FOR THE PERIOD (2011-2021)

Abstract

The study aims to determine the nature of the influence between the financial architecture as an independent variable represented by: the ownership structure, which was measured by a set of indicators represented by (administrative, family, institutional, and foreign ownership) and the capital structure, which was measured by a set of indicators represented by (the ratio of total debt to Total assets, the ratio of ownership rights to total assets, and the ratio of ownership rights to total deposits) and the governance of banks that were measured through (the number of members of the Board of Directors and its meetings), and banking performance as a dependent variable as it was measured through three indicators: liquidity, profitability, and capital. The problem lies in knowing the extent of the impact of financial architecture on banking performance. To answer this question, the study tested a sample of Iraqi commercial banks represented by the Bank of Babel for the period (2011-2021), and the financial statements issued by the banks in the study sample were relied on through the annual bulletins, and then the hypotheses related to the impact analysis between the variables of the study were tested, to reach the required goals. Using the spss.v23 statistical program. The results show that financial architecture is a system based on dimensions, the most important of which are the ownership structure, the capital structure, and governance, which aims to discover modern financing methods through innovative financial tools that keep pace with recent changes in financial performance. The main null hypothesis, states that (there is no significant effect of financial architecture on banking performance) and the acceptance of the alternative hypothesis. The current study recommends the need to follow up the financial architecture in Iraqi banks through its dimensions, because of its great importance on banking performance and contributes to increasing confidence and credibility in financial reports and improving its reputation in the stock market and thus affecting the achievement of the planned goals in banks.