A study of the Impact of Inflation on Return on Equity in Private Commercial Banks Listed on the Damascus Securities Exchange

Abstract

This study aims to EXAMINE the effect of inflation on the return on equity in private commercial banks listed on the Damascus Securities Exchange. Financial data extracted from the financial statements of the studied banks was used, on a quarterly basis, and the descriptive approach was adopted. This was done by using books, research, studies, scientific journals, periodic bulletins and reports, financial data, reports and budgets published by the studied banks, and publications of the Central Bank of Syria. The study variables were extracted from these, and then statistical analysis was carried out on the data of these banks, (11) bank, for the time series (2011-2024) using the statistical program (EVIEWS10) by following the DATA PANEL methodology.

The study results showed that there is a positive effect of inflation on the return on equity of private Syrian commercial banks in the short term, which appears after two quarters. This effect turns into a negative effect starting from the third slowdown period, and this negative effect continues in the long term. The value of the error correction factor for the estimated model shows that private commercial banks do not have the efficiency to manage inflation risks, as they need a year to return to the equilibrium position.