Mohsen Khoshtinat; Mohammad Omidinejad; Monireh Rezvanian
Volume 1, Issue 2 , March 2016, Pages 1-27
Abstract
Insolvency risk of banks accounted for a large part of the banking literature, especially after the global financial crisis and the subsequent widespread bankruptcies of the banks is of great importance. Most banks and credit institutions face with financial insolvency due to the lack of portfolio diversification ...
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Insolvency risk of banks accounted for a large part of the banking literature, especially after the global financial crisis and the subsequent widespread bankruptcies of the banks is of great importance. Most banks and credit institutions face with financial insolvency due to the lack of portfolio diversification of financing structure, lending large amount of loans to a particular industry or economic sector, and the lack of management and control of risks before they come into existence. Since the failure of the financial sector especially banks undermine public confidence in the financial system and as a result devastating effects is transferred on the entire economy, studying factors influencing the risk of insolvency is very important. Hence, the present study uses panel data model (unbalanced panel) and Generalized Least Squares (GLS) to test the effectiveness of the financing structure, credit risks, interest rate risk on insolvency risks of banks. Research data include financial information of 10 commercial public banks, private, and privatized banks under Article 44 during the priod of 2001 to 2012. The results show that specialization financing structure variable has a significant and direct effect on the risk of bank insolvency, while financing structure stability variable over the medium term (mid-term policy of banks lendings) has reverse and significant effect on the risk of bank insolvency. Also, the effect of interest rate risk, credit risk and liquidity risk on bank insolvency risk is significant and positive.
Azam Ahmadian; Hadi Haydari; Hossein Haydari
Volume 1, Issue 2 , March 2016, Pages 29-56
Abstract
In this paper we examined the effects of inflation targeting regime based on the contents of Iranian banking system financial statements during the period of 1981-2014 using Dynamic Stochastic General Equilibrium (DSGE) model. To estimate DSGE parameters, calibration method was utilized. Moments of the ...
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In this paper we examined the effects of inflation targeting regime based on the contents of Iranian banking system financial statements during the period of 1981-2014 using Dynamic Stochastic General Equilibrium (DSGE) model. To estimate DSGE parameters, calibration method was utilized. Moments of the data and Impulse Response Function analyses were used for model verification. The results show that the profit rate shock increases the liquidity sources of banks and as a consequence, bank lending causes an improvement in the investment and production and a decrease in inflation rate. However, inflation targeting for the purpose of reduction in deposit and loan profit rates results in reduction in bank resources and at the same time jeopardizes the soundness of banks. So, we suggest that inflation targeting regime should be combined with the policy of increasing profit rates.
Eldar Sedaghatparast; Siavash Golzarianpour; Hasan Ghaffari Ghazani
Volume 1, Issue 2 , March 2016, Pages 57-84
Abstract
Risk assessment is one of the main concerns of commercial banks when granting loans. Although there are several methods including financial ratios to assess the credit risk of customers, the aim of this article is to apply several financial and performance indicators to assess legal customors credit ...
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Risk assessment is one of the main concerns of commercial banks when granting loans. Although there are several methods including financial ratios to assess the credit risk of customers, the aim of this article is to apply several financial and performance indicators to assess legal customors credit risks. The statistical population of this study consists of 212 companies active in three industries (automotive, food and leather) during the time period of 2011-2013 which borrowed more than 1 Billion Rials from the Bank Mellat of East Azarbaijan Province. To measure the credit risk, we used the company’s efficiency along with financial ratios. Logistic regression was applied to test the hypotheses. The results show that the efficiency has highest predictive power than the other profitability ratios to forecast the default of loans. However, among the financial ratios, only company size (sales) was significant.
Mohammad Javad Mohagheghnia; Ahmad Bakhtiari; Ehsan Golvani
Volume 1, Issue 2 , March 2016, Pages 85-113
Abstract
The experience of implementing no-interest banking rules in 3 decades in Iran shows that existing banking system has been faced with a lot of challenges in different areas. In order to fulfill the Islamic banking rules and regulations properly and to force all the banks to follow this system practically, ...
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The experience of implementing no-interest banking rules in 3 decades in Iran shows that existing banking system has been faced with a lot of challenges in different areas. In order to fulfill the Islamic banking rules and regulations properly and to force all the banks to follow this system practically, first these challenges and difficulties should be identified and categorized and then they should be resolved. To achieve this goal, some of the factors that should be identified are human and management factors. In this research, we have used field study and literature review to collect the data. Using survey and Delphi technique, the human and management factors are identified and categorized. Then, the share of these elements in practical infidelity of banks to Islamic banking system was identified. Statistical calculations were done using SPSS software. Cronbach's alpha was above 0.7 so the reliability of the questionnaire was acceptable. However, construct validity was not calculated due to the low number of samples, research methodology, and raising the level of expertise. For statistical inference about the population, sample mean and parametric one sample T-test was used. To determine the impact of variables and components variances described and varimax rotation was used. The findings of this research show that human and management factors and also the problems of Iran banking system pattern are the major reasons for practical infidelity of the banks while management factor has the higher portion. At the end, some reformatory suggestions are proposed.
Marziaye Karimi; Tohid Firozan
Volume 1, Issue 2 , March 2016, Pages 115-139
Abstract
Considering the important role of banks in the economy, it is necessary to study the effect of internal and external factors on the performance of banks. In this regard, this paper examines the impact of bank profit rates of the exchange contracts on the performance of banks during the time period of ...
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Considering the important role of banks in the economy, it is necessary to study the effect of internal and external factors on the performance of banks. In this regard, this paper examines the impact of bank profit rates of the exchange contracts on the performance of banks during the time period of 2008-2013. For this purpose, econometrics analysis and estimation of panel data is used. The results show that there is a significant relationship between profit rate and other selected variables with the bank’s profitability. This study showed that the profit rate of the exchange contracts has a positive relationship with the return on assets ratio of banks. Hence, while selected banks considered in this study have increased their assets using different methods due to the inflationary conditions, they do not welcome the reduction in profit rates of the exchange contracts. This issue may be true in all other banks due to their role in corporates ownership. Accordingly, finding no solution to leave corporate ownership by the banks, the conditions for high rates of loans in the country is paved. Also, the results show that the other banking variables such as, interest-free income to assets ratio and loan to asset ratio, has a significant and positive correlation with the profitability of banks.
Esmaeli Lalegani; Sajjad Abdolahpour
Volume 1, Issue 2 , March 2016, Pages 141-164
Abstract
Islamic banking has been formed on the basis of delegation and participation in the profits and losses and puts a great emphasis on the real economy and investment in these sectors. So, for the development of this concept in our country, we first need to know what understanding of this concept by experts ...
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Islamic banking has been formed on the basis of delegation and participation in the profits and losses and puts a great emphasis on the real economy and investment in these sectors. So, for the development of this concept in our country, we first need to know what understanding of this concept by experts and bank managers there exists. Therefore, in this article the amount of the bank's managers and experts of Islamic banking functions is studied. This study is an applied research and descriptive survey with a statistical population of 158 experts and experienced senior bank managers of Bank Refah in Tehran province. The results showed that the perceptions of samples of all Islamic banking functions except for the use of marketing techniques are at a high level. Also, based on Friedman ranking test it became clear that among the Islamic banking functions, Question 10 (maximizing the interests of shareholders and standard of living and welfare of society) has the highest and Question 7 (the application of appropriate marketing programs tailored to islamic banking services) has the least important rank.
Ayatollah Ebrahimi; Omid Torabi; Hero Farabi
Volume 1, Issue 2 , March 2016, Pages 165-196
Abstract
Asset portfolio management as a concept in Financial Management, in a wide range of markets, is the notion of calculating correlation between various assets and the total assets portfolio and portfolio analysis using Beta factor of Capital Assets Pricing Model (CAPM). In this article, we have tried to ...
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Asset portfolio management as a concept in Financial Management, in a wide range of markets, is the notion of calculating correlation between various assets and the total assets portfolio and portfolio analysis using Beta factor of Capital Assets Pricing Model (CAPM). In this article, we have tried to perform correlation analyses in a commercial bank and its branches using CAPM. Therefore, a bank is assumed as an asset portfolio of its various branches and the correlation of each branch to the whole is calculated. Due to the importance of non-performing loans in the behavior and correlation analyses of each branch, it is considered as the basis for calculating Beta factor and conditions of the branches to select an optimal portfolio for better supervision of the branches. Based on behavioral sensitivity, 5 portfolios of branches are formed and the optimal portfolio of the bank is analyzed and suggestions for better supervision and control of the branches are proposed.
