Faris Alshubiri

Department of Accounting and Finance,

College of Commerce and Business Administration,

Dhofar University, Sultanate of Oman,

fa_shub@yahoo.com

THE IMPACT OF FINANCIAL POSITION ON RISK ASSET RATIOS: EMPIRICAL STUDY OF BANKING SECTOR LISTED IN MUSCAT SECURITY MARKET

Abstract. This study aims to analysis the impact of financial position based on four groups of risk asset ratios as capital adequacy based on three variables in the banking sector listed in Muscat Security Market (MSM) of Oman. The population of this study is six banks from the period 2009 to 2013. The multiple regression results indicate there is an impact of asset quality and total regulatory capital ratio and between asset quality, profitably and tier 1 capital ratio and finally, debt, liquidity ratios and risk of default ratio. The results of person correlations matrix  shows there is a relationship between asset quality, profitability, debt and liquidity in different variables and asset risk. The researcher recommends for banks do not focus on a specific sector lending, which may increase the risk and must search constantly for alternative plans of financing to maintain growth.

Received: May, 2015

1st Revision: July, 2015

Accepted: September, 2015

DOI: 10.14254/2071- 789X.2015/8-3/7

JEL Classification: G32, D22, G21

Keywords: Financial Position, Risk Asset, Empirical Analysis MSM, Banking Sector.