Clarification of the Relationship between Various Obligations and Profitability in Banks Listed on the Stock Exchange from 2016 to 2020

Rakhshan, Mojahed; Mahmoudian Zadeh, Ramin; Hosseini, Seyed Ali; Khalilarjmandi, Morteza

doi:10.22034/jifb.2022.321951.1312

Clarification of the Relationship between Various Obligations and Profitability in Banks Listed on the Stock Exchange from 2016 to 2020

Document Type : Original Article

Authors

Mojahed Rakhshan ¹

ramin mahmoudian zadeh ²

seyed ali hosseini ³

morteza khalilarjmandi ⁴

¹ PhD student in Accounting, Islamic Azad University, Sari Branch - Financial Expert, Management Accounting Office, Bank Shahr

² Master of Business Administration, majoring in Financial Management, Islamic Azad University, Abhar Branch

³ Master of Business Administration, majoring in Financial Management, Islamic Azad University, Firoozkooh Branch

⁴ Master of Economics, Islamic Azad University, Firoozkooh Branch

https://doi.org/10.22034/jifb.2022.321951.1312

Abstract

The importance of banks' profitability can be examined at all levels of the economy. More profitability of banks not only allows them to provide credit and more activity in the field of obligations, but also makes it easier for bank policymakers to invest in risky environments. Obligations studied in this study include letters of credit, bank guarantees and other obligations that the non-gross income resulting from their opening and issuance is always considered. All banks and credit institutions listed on the stock exchange constitute the statistical population of the research and the statistical sample consists of 16 banks that in the period under review (five-year period from 2016 to 2020) audited financial statements. They are available in the comprehensive information system of publishers. Hypotheses have been tested using regression methods and correlation coefficient. The results indicate the efficiency and significance of the regression model and the existence of a correlation and positive correlation between the types of obligations and net profit (loss) of banks at the medium level. Among the types of variable obligations, letter of credit has the highest correlation with net profit (loss), so more attention to letter of credit in order to earn profit is important.

Keywords

Profitability

Obligations

Letters of credit

Bank guarantees