2025, Vol. 8, Issue 2

author(s)
Ahmed Jasim Mohammed and Ahmed Abbas Hussein

abstract
This study focuses on the impact of financial flexibility on improving the stability and financial performance of commercial banks in emerging countries, with a focus on the Iraqi banking sector. The importance of this research stems from the growing need for banks to improve their ability to cope with economic challenges and uncertainty, as well as financing constraints and market volatility. This is particularly important given the intense competition within banks, enabling them to effectively manage risks and adjust their capital structure and funding sources to maintain the stability of the banking system. The study aims to examine whether financial flexibility and its indicators contribute to improving financial results and ensuring long-term stability, and to provide practical recommendations to bank managers and policymakers on the importance of financial flexibility for financial performance. This study uses panel data for a number of Iraqi commercial banks over the period 2012-2022. Statistical and financial methods, correlation tests, and data analysis models were used to measure the relationship between financial flexibility and financial performance indicators. The results showed that a high level of financial flexibility significantly contributes to improving profitability, helping banks better adapt to economic shocks. The study concludes that financial flexibility is a key factor for sustainable bank performance and restructuring strategies for low-profit banks.