Financial risks and its effects on banking profitability - Kuwaiti Islamic banks as a model - (econometrics study for the period 2012-2020)

The aim of this study is to test the effect of financial risks on the return of Kuwaiti Islamic banks for the period 2012-2020. The study was based on the process of collecting data on the financial statements of the banks, the sample of the study, and for the purpose of reaching results that enable us to test the hypotheses, the relationship between the financial risk variables (credit risk, liquidity risk and capital risk) and banking profitability variables (rate of return on assets, rate of return on ownership and rate of return on deposits) has been formulated in three models. It was estimated by using PANEL DATA applied to EViews 09 program. Based on this, the study concluded that the financial risks represented by credit risk, liquidity risk and capital risk have a significant impact on the return of banking institutions for the study sample.