Quarterly Studies in Banking Management and Islamic Banking

Abstract By Collecting economic activists' savings banks can obtain huge capitals, and if directed properly, this can lead to production prosperity. Given the competitiveness in financial markets, the correct pricing of facilities and credits, and especially a correct evaluation of risks regarding the receivers of financial facilities, the optimized allocation of risk costs for various kinds of facilities receivers based on risk is of utmost importance. Therefore, given the existing complexities in the activities and economic environments, the banks and other credit institutions should design and choose appropriate models to evaluate their clients' credit rates. In this paper, we focus on the financial criteria of the customers' credit risk as well as the relationships between the credit risks' criteria and measures and collecting debts. Thus, according to the theoretical fundamentals, as well as the empirical studies, using the financial ratios based on the interviews with elites, Bank Mellat managers, university experts, and some active organizations in the field of banking, we evaluate the credit volume allocated to the enterprise. Then, using the analytic hierarchy process (AHP), the components affecting the credits are ranked and analyzed based on a fuzzy expert system.
 

Abstract      Non-performing loans are one of the most important data used to determine the efficiency of banks as well as the health of banking sector and the effects of financial crisis. In recent years, the increase in non-performing loans needs for more rigorous researches. On the other hand, economic activities have been facing considerable fluctuations in major macroeconomic indicators.     This study, therefore, aims at investigating the impact of fluctuations in macroeconomic variables on non-performing loans over the years 1978-2015 (during the Islamic revolution period) in Iranian banks.     In order to capture the aforementioned relationship, an EGARCH model has been employed. To meet the econometric validity requirements, vector auto regression (VAR) has been used to fit the proper model.     It is shown that the macroeconomic indicators have significant impacts on NPLs, more precisely the ratio of non-performing to total loans. According of the results, most of the long term changes in NPLs are explained by their past values and other important variables including oil revenue, budget deficit, inflation, GDP and unemployment rate.

Abstract Today, banking system plays a very important role in growth and development of countries. From the very beginning of banks establishment, they have two main and traditional tasks, namely, the equipping and allocation of resources. These two important tasks are implemented so that they collect the people's deposits on one hand and put it in various forms of allocation, on the other hand. In performing these tasks, banks face different internal and external barriers that affect their responsibilities. One of the external factors affecting the banking system is the volatile environment of economy and macroeconomic uncertainty. The macroeconomic instability and uncertainty ultimately reflect into two main variables of each economy, namely, production and inflation. This research seeks to investigate the effect of uncertainty and instability of macroeconomic variables (production and inflation) on the resources and expenditures of Iran banking system using GARCH techniques and Error Correction Model (ECM).
The results of the research show that the effect of instability and uncertainty of production growth on the growth of resources of the banking system (resource mobilization) is negative and significant and on the allocation of resources (growth of credits) is positive and significant, resulting in increasing the banks' credit risk. Moreover, in this study, the significance of the negative effect of instability of inflation on resource absorption and its positive effect on allocation of resources are not accepted.