he Role of Credit Quality Management in Improving LiquidityRatios and Prudential Capital Adequacy for Commercial Banks inAl-Anbar Governorate

The aim of this research is to diagnose the role of loan quality management in improving liquidity ratios and prudential capital adequacy for commercial banks operating in Anbar Governorate for the period between 2019 and 2024. The research problem stemmed from a main question: what impact does loan quality management have on liquidity ratios and prudential capital adequacy in these banks? To answer this question, three main hypotheses were formulated linking the dimensions of loan quality management (quality of the loan portfolio, collection efficiency, provisions for doubtful debts, and credit granting policy) with the variables of liquidity and capital adequacy. A quantitative analytical approach was adopted as the sole methodology for the research, relying on data from the annual financial statements of a sample consisting of six commercial banks that have active branches within Anbar Governorate. Descriptive statistics, arithmetic means, standard deviations, Cronbach's Alpha coefficient, Pearson's correlation test, and multiple linear regression analysis were used to test the hypotheses. The results showed a significant positive correlation between loan quality management and liquidity ratios (r = 0.824), a significant effect between the quality of the loan portfolio and prudential capital adequacy (R² = 0.712), in addition to the significance of the third hypothesis linking provisions for doubtful debts to the improvement of the capital adequacy ratio. The research recommends establishing a specialized unit for loan quality management within each commercial bank in Anbar Governorate, linking it directly to risk management and liquidity management.