The effect of internal risks on the performance of Jordanian commercial banks
Performance of banks represents their success considering capital, profitability, and shareholders? equity and thus, banks generally utilize various instruments to improve their success potential. Nevertheless, banks are faced with various challenges in the form of economic and financial crises, dynamic technological communication development, and lack of control over the activities of financial and administrative departments. To this end, banks must deal with distinct internal and external risks. Improving bank performance involves increasing the Net Interest Margin (NIM), Return on Assets (ROA), Return on Equity (ROE) and minimizing if not eradicating other possible risks that may arise (Pidada, Yuesti & Kepramareni, 2018). ROA refers to the ratio between net income and total assets, while ROE refers to a measure obtained when dividing net income by shareholder?s equity (Al-Eitan & Bani-Khalid, 2019) and both are used banks performance proxies in the present study. In literature, scholars made use of various commercial banks samples all over the globe to examine the effects of external and internal risks on the bank?s financial performance. A group of studies in literature focused on the effect of internal risks of banks on their financial performance and these included studies by Mohamed (2020), Bekhet, Alsmadi and Khudari (2020), Mennawi (2020), Inegbedion, Vincent and Obadiaru (2020), Abu-Alrop
Publishing Year
2021