Predicting Financial Distress and Assessing the Sustainability of Islamic Banks in Iraq: An Applied Study Using the Altman Z-score Model

Abstract This study aims to determine the extent to which the modified Altman model can predict the financial distress of Islamic banks in Iraq. Data was collected from the annual financial statements of eight Iraqi Islamic banks listed on the Iraq Stock Exchange, with complete financial statements available for the period 2020-2024. The study employed a descriptive (analytical) methodology and concluded that some Islamic banks are experiencing financial distress while others are performing well. The modified Altman model demonstrated a high predictive capability in identifying financial distress. Keywords: Financial distress, Altman Z-score model, Islamic banking continuity, Iraqi Islamic banks