The Empirical Assessment of Banks’ Performance and the Contradictory Role of Country-Level Risks
摘要
Jordanian banking sector is vulnerable to many macro-risk factors like other financial sectors across the world that have an impact on its performance, and due to the prominence importance of the banking sector, it necessitates sustaining the a solid and financially healthy banking sector. The study will determine the power of country-level risk (macro-variables) that are symbolized in inflation rate (INR), gross domestic product (GDP), and interest rate (IRR) on stock market price (SP) and operational cash flow per share (OPCFS) as indicators of Jordanian listed Banks’ financial performance at Amman Stock Exchange (ASE) for 15 years ending 2022. The results indicated that GDP positively impacts banks’ performance indicators’ (SP and OPCF). But IRR and INR demonstrated a significant adverse influence on SP and OPCF. Furthermore, the findings also indicate a significant volatility in the inflation rate over the study period, which may discourage investment in Jordan.In light of this, Central Banks should implement effective legislative measures to control the inflation rate. Additionally, banks should operate new approaches to reduce lending interest rates and explore alternative investment options to improve their financial performance.