Financial soundness test of commercial banks using the Patrol model

Abstract

The purpose of this study is to provide a comprehensive empirical analysis of the study of testing and evaluating the financial soundness of the Al-Jamahiriya Bank and the Islamic Yaqeen Bank and classifying the banks according to their financial soundness using the PATROL model indicators, relying on the case study approach. The study was based on data derived from the published financial statements of the two banks for the period from 2018 to 2022, where these data were financially analyzed using the approved model indicators. The study reached a set of results, the most prominent of which was that the Islamic Yaqeen Bank outperformed the Al-Jumhuriya Bank in some financial indicators of the PATROL model, which include capital adequacy, profitability, credit risk, regulation, and liquidity. Then the banks were classified according to their financial soundness and it was found that the Islamic Yaqeen Bank was sound and that the Al-Jumhuriya Bank was below average in its classification. Accordingly, the study recommended the need to monitor the following indicators for the Al-Jumhuriya Bank, namely capital adequacy, credit risk, and profitability, which maintained the same classification of 5 over the years of the case study, so it needs continuous monitoring.