Evaluation of the Performance of Libyan Commercial Banks According to the Return on Equity Model: An Empirical Study of Al-Wahda and Al-Jumhuriya Banks - Libya

Abstract

 This study aimed to evaluate the performance of Libyan commercial banks according to the return on equity model, and through an applied study of the financial statements of Al-Wahda and Al-Jumhuriya Banks - Libya for the period from 2021 to 2023. The study relied on the descriptive analytical approach, and reached many results, the most important of which are: accepting the first hypothesis, which states: "Using the (asset utility AU) rate, the financial position of the commercial banks under study is good", rejecting the second hypothesis, which states: "Using the (financial leverage EM) rate, the financial position of the commercial banks under study is good", accepting the third hypothesis, which states: "Using the (profit margin PM) rate, the financial position of the commercial banks under study is good", accepting the fourth hypothesis, which states: "Using the (return on assets ROA) rate, the financial position of the commercial banks under study is good", He rejected the fifth hypothesis, which states that "using the rate of return on equity (ROM) that the commercial banks under study are in good financial condition.", the financial position of the commercial banks under study is good". The study made several recommendations, the most important of which are: avoiding excessive reliance on debt financing and relying on equity financing; exploiting and employing available resources and operating assets in a manner that serves the bank's ability to achieve the highest level of profitability; and enhancing the bank's management's ability to monitor its costs.