The impact of banking liquidity on commercial Profitability-Bank of Baghdad: A Case Study for the period (2007-2023).

The research aims to identify the role of banking liquidity in commercial profitability with the Bank of Baghdad as a case study and to ascertain the nature of the correlation between the variables under investigation, whether it is an inverse or a direct relationship. Accordingly, the liquidity indicators of the Bank of Baghdad were analyzed for the period (2007-2023). A hypothesis was developed stating that there is a significant negative impact of banking liquidity on profitability. To prove the research hypothesis, the standard model was described, with (cash to total assets ratio) as an independent variable, while commercial profitability was the dependent variable. The results indicate that the level of liquidity plays a vital role in enhancing the competitiveness of banks, as it enables them to meet customer needs and exploit investment opportunities. The study also showed that effective liquidity management helps improve returns, which positively impacts profitability, as well as adapting to changing economic conditions and the necessity of innovation in financial services to ensure sustainable profitability. The research reached a number of conclusions, most notably that banks with high levels of liquidity are better able to invest in business opportunities effectively, which contributes to enhancing their profitability. Banks that enjoy high flexibility and the ability to adapt to economic changes are more successful in achieving profitability.