The effect of the efficiency of the bank’s management on the return on assets and the return on equity A case study in Iraqi private commercial banks

Abstract

The research aims to assess the impact of the efficiency of the management of banks on the return on assets and the return on the right of ownership of Iraqi commercial banks for the period from 2010 to 2015. The independent variables represented the efficiency of management, the bank and were expressed in the ratio of expenses to revenues and the ratio of investment in securities to current assets. As for the dependent variables, they were return on assets (ROA) and return on equity. (ROE) The panel data analysis and the statistical analysis were relied on with the help of the statistical program (EViews V.9). The results showed that there is an effect of the efficiency of management in the return on assets (ROA), while there is no effect of the efficiency of bank management on the return on equity (ROE) of private commercial banks in Iraq. We recommend the necessity of enhancing banks’ management of cost management strategies and using appropriate target cost management techniques in order to enhance the bank’s profitability level, applying cost-benefit analysis in their decisions that benefit stakeholders, and conducting a continuous review of the volume of assets that generate revenues and identifying the appropriate type of investments at the right time.