Evaluating the Financial Performance of Libyan Commercial Banks Using the Capital Adequacy Standard: An Applied Study of Commercial Banks Operating in the City of Ajdabiya

Abstract

This study aims to evaluate  the  financial  performance of Libyan  commercial  banks  by  applying  the  internationally  adopted  capital  adequacy  standard  (the  Basel  Committee  standard)  and  the  instructions  issued  by  the  Central   Bank  of  Libya,  To  achieve  this  objective,  the  study  adopted  the   descriptive – analytical  approach  to  address  the  theoretical  aspects,  alongside  the  statistical  approach  to  analyze  financial  data  extracted  from  a  sample  of  commercial  banks  during  the  study  period.                                                                                                                  

The  study  concluded  with  several  findings, most  notably  the  variance  in  the  level  of  compliance  among   Libya  commercial   banks   with   standard  capital   adequacy  ratios,  as   well  as  the  existence   of  a  statistically  significant  impact  of  the  capital  adequacy  level  on  the  efficiency  of  financial   performance,  its  stability,  and  the  banks,  capacity  to  mitigate   potential  risks  (such  as  credit  and  operational  risks).  in  light   of  these  findings,  the  study recommends   the  necessity  of  bolstering  the  banks,  capital  bases,  activating   banking  supervision  tools,  and  maintaining ongoing  compliance   with   regulatory requirements  issued  by  supervisory  authorities  to  ensure  the   soundness of  the  banking  sector  and  protect  depositors, rights.