The Impact of Interest Rate Fluctuations on Banks' Financial Performance

An Applied Study of the Commercial Bank of Iraq and the Middle East Bank for the Period (2020-2023)

Abstract

Abstract :

 The  issue of interest has been  and is a  point of difference between economists since ancient times, through interest  rates, the  monetary policy tools of the Central Bank of the State  can be implemented  in order to reach the economic goals set by the economic policy of any country, and with the emergence of banks, which are considered the lifeblood of the economy and the main cell of the growth and engine of the national economy, because they preserve  the country's money. In order to move them, develop them and facilitate their trading, the interest rate has become the immune system   of commercial banks because of its great impact on the imports  and expenses of these banks through the interest rates debited and credited applied to their activities and the gap between them, and within this framework, the researcher aimed to study the extent of the contribution  of interest rate fluctuations on the profitability of the Commercial Bank, by applying it to the Iraqi Commercial Bank and the Middle East Bank during the period 2020-2023 because credit and debit interest constitute a large percentage of the bank's revenues and expenses, by presenting the size of the bank's revenues and expenses and the extent to which they are affected by the interest rates imposed by the Central Bank,  and the hypothesis of the study was "The profitability of the bank is affected by the fluctuations of interest rates, and the conclusions of the research concluded a set of results, most notably that the profitability of commercial banks consists mostly of  the prices of the banks. Interest which expresses the difference between the interest payable on the granted facility and the interest debit paid on the deposits.