The Financial Health and Firm Value of the Financial Institutions in the Iraqi Banking Sector

The study examines the relationship between financial health indicators and corporate value in financial institutions in developing countries. The research relies on the quantitative approach to test the study hypotheses using a sample of Iraqi private commercial banks, which included (15) banks listed on the Iraq Stock Exchange for 2013–2022. The results show that four financial health indicators positively relate to corporate value in the sample banks: return on assets, return on equity, rate of return on funds available for employment, and net profit margin. The results confirm that understanding the financial position of banks is very important because banks are the most influential financial institutions in the economy, and their financial health describes their financial position. Moreover, the association between manager retention and bank success shows its importance to management. Good financial health indicators also reflect the bank's ability to continue and face risks and crises and keep pace with technological challenges and others, which attracts the attention of investors and thus the increasing demand to buy its shares, which leads to an increase in its share prices and thus its returns. The research contributes to the literature related to financial management in the banking sector by highlighting the critical direct relationships between financial health and corporate value in the banking sector in Iraq. He also points out that financial health and corporate value directly affect each other in developing countries.