Effect of Interest Rate Risk on Financial Performance the Mediating Role of Banking Security Degree: Evidence From the Financial Sector in Jordan

Abstract

The current study aims to determine the effect of interest rate risk on financial performance through the banking security degree as a mediating variable. The study population includes 13 Jordanian commercial banks from 2011 to 2018. To achieve the current study objectives, a descriptive and analytical approaches were used. Furthermore, Baron and Kenny’s test (1986) were adopted to examine the current study hypotheses. The results found that the banking security degree partially affects the relationship between interest rate risk and financial performance. Accordingly, this study provides a set of recommendations. Among them, we encourage policymakers and bank owners, and managers to develop efficient interest rate risk policies continuously in addition to strengthening the monetary and financial policies of the banking sector. They should strive to achieve a balance between each of the risks of interest rate, performance, and banking security degree.

The Effect of Interest Rate Risk on Financial Performance with the Mediating Variable of Banking Security Level (Study on Commercial Banks that Go Public in BEI)

“…Prior research has demonstrated that interest rate risk has a positive and statistically significant impact on financial performance, as evidenced by studies conducted by Amsalu (2019). In addition, studies conducted by Al-Slehat (2022), Shaheen & Sabah (2011), & Al-Slehat (2022 have demonstrated a positive association between interest rate risk and the level of banking safety. In addition, Khrawish et al (2004) discovered a positive association between the degree of banking security and financial success.…”

“…between 2008 and 2013. The research conducted by Al-Slehat (2022) found that Interest Rate Risk enhanced the security of Jordanian commercial banks. Jordan from 2000 until 2011.…”

Interplay between Digital Marketing, Business Analytics and Innovation Capability: A Case of Greece SMEs

“…Consequently, online purchase intention has become a viable and increasingly preferred option for consumers. According to Al-Slehat (2023), the number of Internet users surpassed 4 billion in 2017, marking a substantial increase of 577% compared to the total in 2000. Notably, the Asian region accounts for 49.2% of the global Internet user base.…”

“…In today's business world, organisations must overcome enormous obstacles caused by dynamic market conditions marked by rapidly changing consumer tastes, regular changes in the competitive landscape, and the ongoing development of new digital technologies (Al-Slehat, 2023). To thrive in such an environment and retain their relevance and pro􀅫itability, businesses must innovate and adopt new business strategies (Shegai et al, 2023).…”

“…SMEs require assistance implementing new technologies due to their increased resource and knowledge needs (Al-Slehat, 2023). Furthermore, they have to catch up in terms of innovation and diffusion since they don't fully comprehend business challenges such as inadequate knowledge management and a lack of 􀅫inancial resources (Biclar, 2022;Hayajneh, Elayan, Abdellatif, & Abubakar, 2022).…”