Title: The effect of liquidity hoarding and credit risk on the performance of Syrian private banks

Authors: Haidar Haidar

Addresses: Accounting Department, Economics Faculty, Latakia University, Latakia, Syria

Abstract: The aim of the study is to analyse the impact of liquidity hoarding and increased counterparty credit risk on the performance of Syrian private banks, which have significantly increased their liquidity hoarding and decreased their lending activities in response to the prevailing economic conditions. To fulfil the purpose of the study, data were collected from the published annual financial reports of listed Syrian private banks from 2010 to 2022. Pooled regression with White's corrected error terms was employed to model the effects of liquidity hoarding and credit risk on return on assets (ROA) and return on equity (ROE), after controlling for size, operating efficiency, and capital adequacy. The results demonstrate a negative and significant effect of credit risk on banks' performance, while no significant effect could be detected for liquidity hoarding or the interaction between liquidity hoarding and credit risk.

Keywords: liquidity hoarding; credit risk; performance; return on assets; ROA; crisis period; Syrian banks.

DOI: 10.1504/AAJFA.2025.149805

Afro-Asian Journal of Finance and Accounting, 2025 Vol.15 No.6, pp.707 - 722

Received: 30 Mar 2024
Accepted: 17 Sep 2024
Published online: 13 Nov 2025 *

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