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Determinants Of Interest Rate Spread In Banking Industry

Author

Listed:
  • Arezoo GHASEMI,

    (Department of Economics, University of Economic Sciences, Iran)

  • Malihe ROSTAMI

    (I Department of management, university of Grenoble, France Department of finance and accounting, Electronic Branch, Islamic Azad University, Iran)

Abstract

This study is done to consider affecting factors on spread rate and define a suitable model of spread rate in banking industry. Spread rate is a difference between two related interest rates. In banking industry, spread rate is the difference between debts rate (especially for deposit) and assets rate (Especially for loan). Interest rate spread has always been one of the most important and significant economic issues in different countries of the world. In this study, affecting factors on spread rate are considering in an Iranian bank during the last 19 month. Some variables such as NPL ratio, ratio of demand deposits on deposits, non interest income, and interest assets to assets, capital adequacy ratio, ROA ratio and inflation and exchange rate are analyzed on spread rate and a model is defined for bank according to prior studies and economical issues of Iran.

Suggested Citation

  • Arezoo GHASEMI, & Malihe ROSTAMI, 2016. "Determinants Of Interest Rate Spread In Banking Industry," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 5(1), pages 1-46, January.
    • Handle: RePEc:scm:ecofrm:v:5:y:2016:i:1:p:46
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    References listed on IDEAS

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