The effect of using the risk-adjusted rate of return on capital in risk management on profitability (with loan quality as a supporting variable) "An applied study on Libyan commercial banks from an accounting perspective"

Abstract

I aimed This study aimed to identify the rate of return on risk-adjusted capital in Libyan commercial banks and measure the impact of its use on profitability, and to identify the effect of the quality of loans as a supporting variable on the rate of return on risk-adjusted capital in Libyan commercial banks. The researchers used a supportive regression analysis model. To study this problem, the descriptive analytical approach was followed in analyzing the study data. The study population was identified in commercial banks, and this study was limited to analyzing the financial data obtained from the financial statements of publicly owned commercial banks, which are(National Commercial Bank, Al-Wahda Bank, Sahara Bank, and Al-Jumhuriya Bank)In addition to the Trade and Development Bank for the period from(2000-2018)One of the most important findings of this study is the existence of a correlation between the rate of return on risk-adjusted capital and profitability in all the Libyan banks under study, as was one of its most important recommendations. Increased attention must be paid to managing liabilities by focusing and studying the elements of debt, especially deposits, which are considered the main source of commercial banks’ funds, so that banks can determine the percentage that can be used for employment in order to avoid the risks of financial distress