The effect of loan portfolio diversification on stock returns: the mediating role financial solvency in commercial banks

The current research aims to test the diversification of the loan portfolio using the Hirschman-Herfindahl index and its impact on stock returns through the mediating role of financial solvency. This is based on the data and financial statements published in the Iraq Stock Exchange for Iraqi banks, which number (24) banks, like the total of the research community, and (7) banks were selected from them on the basis of the availability of the required data during the research period from (2005-2022) and these selected banks It represented the research sample. The research problem was the fluctuation and instability of stock returns, which negatively affects investors and the reputation of the banks sampled in the study, which mostly results from the bank’s inability to diversify its loan portfolio and its weak ability to employ financial solvency indicators to achieve outstanding performance.

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Publication Details

Journal
Iraqi Journal for Administrative Sciences
Published
2024-12-12
DOI
https://doi.org/10.71207/ijas.v20i82.2788
Primary Topic
Islamic Finance and Banking Studies
Type
article
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article

The effect of loan portfolio diversification on stock returns: the mediating role financial solvency in commercial banks

Ali Fares, Fatima Ahmed Taher
Iraqi Journal for Administrative Sciences
Islamic Finance and Banking Studies
article

The effect of loan portfolio diversification on stock returns: the mediating role financial solvency in commercial banks

Ali Fares, Fatima Ahmed Taher
article en

Abstract

The current research aims to test the diversification of the loan portfolio using the Hirschman-Herfindahl index and its impact on stock returns through the mediating role of financial solvency. This is based on the data and financial statements published in the Iraq Stock Exchange for Iraqi banks, which number (24) banks, like the total of the research community, and (7) banks were selected from them on the basis of the availability of the required data during the research period from (2005-2022) and these selected banks It represented the research sample. The research problem was the fluctuation and instability of stock returns, which negatively affects investors and the reputation of the banks sampled in the study, which mostly results from the bank’s inability to diversify its loan portfolio and its weak ability to employ financial solvency indicators to achieve outstanding performance.

Iraqi Journal for Administrative SciencesVol. 20(82)
University of Kerbala (IQ)
Partnerships for the goals
Openalex Percentile: Top 58%
Islamic Finance and Banking Studies
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