Wisam Fadhil Hanoon, Mohammed Zaki Ward, Abbas Hadi Gatea
Iraq's banking sector is one of the most important economic sectors since it plays a significant role in economic growth, support and development. This study aims to motivate bank executives to enhance internal controls and adhere to banking regulations. For banks to succeed and compete effectively, they must ensure that their activities run efficiently and determine the capital structure decisions to enhance their value and profitability. As a result, banks can make more informed capital structure decisions and improve their performance when they implement sound risk management practices. Using path modeling, determine the impact of capital structure and credit risk on the profitability of Iraqi private banks. A total of 405 observations from four Iraqi banks were analyzed between 2015 and 2022 we estimated a PLS-SEM path model. In Iraqi banks, credit risk significantly affected their capital structure and had no significant impact on profitability. However, profitability was negatively affected by credit risk. In conclusion, these findings encourage bank leaders to make profitable capital structure decisions and improve risk management practices. A PLS-SEM model has begun to be used in finance and banking; this study illustrates its applicability and advantages.