THE IMPACT OF BALANCING LIQUIDITY AND PROFITABILITY ON EVALUATING AND IMPROVING FINANCIAL PERFORMANCE IN IRAQI COMMERCIAL BANKS

Objective: The study aims to balance liquidity and profitability and its impact on financial performance, one of the most serious problems faced by banks in all countries of the world, because it is an important element that maintains the continuity of the bank’s work. The study aimed to identify the relationship between the three variables and their impact on Iraqi commercial banks. Theoretical Framework: This topic presents the most important concepts and theories on which the research is based. Liquidity, profitability and financial performance stand out, providing a solid basis for understanding the context of the investigation. Method: This study is based on the descriptive analytical correlational approach, which is widely used in human research and studies. The study population is represented by (44) Iraqi commercial banks listed on the Iraq Stock Exchange. The researcher chose (2) banks from these banks that expressed cooperation with him in providing... The data is unlike other banks that did not express cooperation due to fear of leaking some of their information, as they claimed, which they consider important in the nature of their work, in addition to the lack of response from employees in some banks to answer the questions of the questionnaire. The sample members were represented by workers in the banks in the study sample at various levels. Administrative, as (415) questionnaires were distributed to individuals, electronically. Results and Discussion: The results of the study found that there is a direct effect between liquidity and financial performance, directly and indirectly, in whole and in part, in addition to that the profitability variable plays a mediating role between liquidity and financial performance, and this is what leads us to the fact that the balance between profitability and liquidity leads to improved financial performance in Iraqi commercial banks. Research Implications: The practical and theoretical implications of this research are discussed, providing insight into how the findings can apply or influence practices in the area of ​​liquidity, profitability and financial performance. These reflections may include the banks sampled for the study and the services they provide. Originality/Value: The importance of this study came from the scarcity of studies that attempted to define and understand the nature of the relationship between variables (liquidity, profitability, and financial performance), as well as the current study’s attempt to address a realistic problem that directly affects the performance of employees in Iraqi banks.