The current study aims to examine the factors affecting capital structure of (16) banks listed on the Iraqi Stock Exchange (ISX) during the period 2009 to 2014. Several factors could have an impact on capital structure. While, this study concentrates on four characteristics of Iraqi banks and attempts to identify their effect on financing decision of these banks. Growth, profitability, liquidity and size have been used as independent variables. However, the study depends on leverage as a dependent variable to measure the capital structure of banks. Using a multiple linear regression model by (SPSS) program different results have been revealed. The findings show that growth is not one of the determinants of capital structure and it has no effect on the leverage of these banks at all. While, there is a statistically negative relationship of capital structure choice with profitability and liquidity. On the other hand, the findings indicate that the size affects capital structure of the banks positively and significantly. The study could have a great contribution to financing decision of the banks listed on ISX for choosing the optimal capital structure.

Nowadays business environment characterized by different types of risks and relatively high business uncertainty levels. This is because of the changes that have taken place by globalization and liberalization. To avoid these risks, it has been a very important matter for financial institutions to give much more attention to performance evaluation and use advanced tools for early detection of business failure. Therefore, in the financial literature, business failure prediction has been widely studied. From this standpoint, this paper attempts to investigate whether the banks listed on the Iraqi Stock Exchange (ISE) expose to business failure by using Sherrod and Kida models. The population of this paper is restricted to banks listed on the (ISE) from 2011 to 2014. Sixteen banks were selected from the total of twenty three. We entirely relied on secondary data which obtained from financial statements of the selected banks. The study reveals that the exposure of selected banks to the risk of bankruptcy is very low based on Sherrod’s Z-score model. In contrast, the selected banks have serious problems and their exposure to bankruptcy is very high according to Kida’s Z-score model. The study also has concluded that the latter model is unreliable to be applied by banks listed on ISE as its results do not compatible with works of selected banks. The finding of the study can be useful for managers, stockholders, investors and concerned users to visualize the ability of banks’ sustainability.