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Determinants of Profitability in Banking Network of Iran

Author

Listed:
  • Valipour Pasha, Mohammad

    (Monetary and Banking Research Institute (MBRI), Central Bank of the Islamic Republic of Iran (CBI))

  • Ahmadian , Azam

    (Monetary and Banking Research Institute (MBRI), Central Bank of the Islamic Republic of Iran (CBI))

Abstract

This paper seeks to investigate the determinants of banking network profitability in Iran from 2007 to 2012. The results of our study indicate that both bank-specific factors and macroeconomic factors influence banks' profitability in Iran. Results confirm that bank profitability is significantly influenced by investment to total assets ratio, non-performing loans to total assets ratio, and time deposit to total assets ratio. Among external factors, it turns out that economic growth rate has a significant positive impact on bank profitability.

Suggested Citation

  • Valipour Pasha, Mohammad & Ahmadian , Azam, 2014. "Determinants of Profitability in Banking Network of Iran," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 9(2), pages 1-22, October.
    • Handle: RePEc:mbr:jmonec:v:9:y:2014:i:2:p:1-22
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    References listed on IDEAS

    as
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    4. Fadzlan Sufian, 2010. "Financial depression and the profitability of the banking sector of the Republic of Korea: panel evidence on bank-specific and macroeconomic determinants," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 17(2), pages 65-92, December.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Banking network; Profitability; Bank specific determinants; Macroeconomic variables;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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