LIQUIDITY MANAGEMENT AND PROFITABILITY IN ISLAMIC BANKS OF KURDISTAN REGION OF IRAQ: CIHAN BANK FOR ISLAMIC INVESTMENT AND FINANCE AS A CASE STUDY

Abstract

This research intends to analyze the relationship between liquidity management and profitability in one of the most important Islamic banks in Kurdistan Region of Iraq, Cihan Bank for Islamic Investment and Finance P.S.C. It critically examines the bank’s liquidity ratios and the liquidity management system to analyze its effectiveness in using its liquid assets in generating positive net income. Also, it uses profitability ratios to analyze the bank’s financial position. Then, those results are used to interpret the relationship between the two variables mentioned. The research concludes that better management of liquidity is associated with better profitability. In other words, there is a negative relationship between liquidity and profits in Cihan bank during 2009 to 2015.