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Banks Credit Risk, with Emphasis on Audit Report of Legal Customers (in Persian)

Author

Listed:
  • Kordmanjiri, Sajad

    (babol branch)

  • Dadashi, Iman

    (babol branch)

  • Khoshnoud, Zahra

    (Monetary and Banking Research Institute)

  • Gholamnia, Hamidreza

    (babol branch)

Abstract

The increasingly expansion credit risk in the form of non-current debts reduces the bankchr('39')s financial ability to provide facilities and profitability, and could ends up in monetary & financial crisis through its externalities from banking sector to other economic sectors. Therefore, controlling this risk by focusing on the factors that influence its creation is important. Although various variables affect credit risk formation, this study emphasizes the characteristics of audit reporting and non-financial variables of credit risk default and occurrence of credit risk, which are less considered. To this end, the audit features and non-financial variables from 635 of Sepah Bankchr('39')s legal customerschr('39') facilities were extracted for the period 2006-2017 and were predicted by logistic regression, credit risk and default probability. The findings indicated the key role of audit variables including ambiguity in continuity of activity, number of explanatory clauses, and auditor tenure, along with non-financial variables, on credit risk.

Suggested Citation

  • Kordmanjiri, Sajad & Dadashi, Iman & Khoshnoud, Zahra & Gholamnia, Hamidreza, 2019. "Banks Credit Risk, with Emphasis on Audit Report of Legal Customers (in Persian)," Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 12(41), pages 551-576, December.
    • Handle: RePEc:mbr:jmbres:v:12:y:2019:i:41:p:551-576
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    More about this item

    JEL classification:

    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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