Majid Alirezaee; Mohammad Javad Mohagheghnia; Mohammad Ali Dehghan Dehnavi
Volume 4, Issue 8 , June 2018, Pages 1-25
Abstract
This research investigates the effects of increase in the non-shared revenue share of total revenue on risks faced by Iranian banks over the years 2008-2014 using generalized method of moments (GMM). Data were collected from the balance sheets of 18 active banks as well as the central bank website. To ...
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This research investigates the effects of increase in the non-shared revenue share of total revenue on risks faced by Iranian banks over the years 2008-2014 using generalized method of moments (GMM). Data were collected from the balance sheets of 18 active banks as well as the central bank website. To measure the risk four indicators including the volatility of return on equity, the volatility of asset returns, NPL and logarithmic index of stability are employed. The results show that increase in the non-shared revenue share of total revenue not only reduce the overall risk but also increase the stability and sustainability of the banks. In addition, analyzing sub hypothesis of this study shows that this effect is greater during the economic boom.
Seyed Fakhrodin Fakhrhoseini; Meysam Kaviani
Volume 4, Issue 8 , June 2018, Pages 27-49
Abstract
The impact of geographical diversification on the performance of banks is a question that banks always face, and one of the daily issues to respond. This study also seeks to answer the question of how geographic diversification affects the performance of banks accepted in Tehran Stock Exchange. Twelve ...
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The impact of geographical diversification on the performance of banks is a question that banks always face, and one of the daily issues to respond. This study also seeks to answer the question of how geographic diversification affects the performance of banks accepted in Tehran Stock Exchange. Twelve banks sampled by systematic sampling method were examined during the period 2011 to 2015. To examine the geographical diversification a number of cities in which the bank has been active until the year t (excluding the cities with headquarter) are chosen and the performance is measured by market share, net interest income, cost-to-income ratio, return on assets and non-interest income share. The results of model estimation show that geographical diversification has a significant effect on market share of bank and non-interest income.
Mohammad Naghi Nazarpour; Abbas Dadjouye Tavakoli
Volume 4, Issue 8 , June 2018, Pages 51-80
Abstract
Using a descriptive-analytical method, this study proposes a new method to make profit from forfeited properties that can be employed by the banking system to provide cheap financing. The main hypothesis of this study contends that Murabaha bonds for providing liquidity along with their derived instruments ...
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Using a descriptive-analytical method, this study proposes a new method to make profit from forfeited properties that can be employed by the banking system to provide cheap financing. The main hypothesis of this study contends that Murabaha bonds for providing liquidity along with their derived instruments such as legitimate put and call options, with a controlled return risk, can help banks with the frozen profit of forfeited properties and provide cheap financial resources, compared to the current state of the money market. Banks can use this method to sell such assets based on the market rate (calculated through discovering the prices in commodities exchange) and using Murabaha bonds, while postponing the delivery of properties up to two years. This will provide them with the much needed liquidity while taking advantage of the rent until the deadline for delivery, before which, the banks will be entitled to rent out the property according to the contract. At the delivery time, the property will either be handed over to the intermediate company (SPV) to be sold in the market and the sums divided among bond holders; or the manner of final settlement will be determined by granting the rights for call option and put option respectively to the bank and the intermediate company on behalf of the bond holders. Considering that there is no obligation in call and put options as a second contract, Murabaha contract will not lead to Ba'i al-'Ayn (sales in cash of a property just bought on installment).
Zahra Zamani; Abolfazl Jannaeti; Maryam Ghorbani
Volume 4, Issue 8 , June 2018, Pages 81-104
Abstract
Nowadays, bank as the most important element of the financial market plays a significant role in the countries' economy especially Iran, which relies on the banking system. So the study of banking system and factors affecting its performance are very important. One of these factors is the exchange rate, ...
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Nowadays, bank as the most important element of the financial market plays a significant role in the countries' economy especially Iran, which relies on the banking system. So the study of banking system and factors affecting its performance are very important. One of these factors is the exchange rate, a key variable in every economy. In recent years, the exchange rate in the Iranian economy has encountered many fluctuations. Exchange rate fluctuations in developing countries like Iran, due to the lack of developed financial markets, expose these countries to financial crises. The exchange rate fluctuations and the volatility of financial markets can have an unfavorable impression on the stability of banks. This is due to the lack of the ability in eliminating the impact of exchange rate fluctuations even by using the risk management techniques; and on the other hand, developing countries do not have the essential tools to deal with these fluctuations. Thus, these countries are more vulnerable, and more likely exposed to financial crisis. Therefore, this study investigates the impact of exchange rate fluctuations on the performance of Iranian banking system using Generalized Method of Moments (GMM) in dynamic panel data context during 2009-2014. To evaluate the banking performance, two criteria of revenue and asset quality have been considered and for evaluating these criteria accordingly, the ratio of return on assets as well as the ratio of outstanding claims to total paid facilities has been applied. The results of this study show that the exchange rate volatility has negative significant impact on the return on assets of banks. The exchange rate fluctuations impose different types of risks on banking system such as transaction risk, conversion risk, credit risk, interest rate risk and due to these risks, the profitability of banks decrease. Similarity, exchange rate fluctuations are an effective and positive factor in clarifying the ratio of outstanding claims to the total payable facilities of banks because they lead to create credit risk, and as a result increase outstanding claims of banks.
Mahshid Shahchera; Mahnaz Valizadeh
Volume 4, Issue 8 , June 2018, Pages 105-125
Abstract
One of the key indicators in the banking sector is bank leverage. Bank leverage refers to how resources are used in the balance sheet to finance the assets. The quality of banking assets has a significant impact on lending in banks. The proper use of bank leverage can lead to getting appropriate profit ...
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One of the key indicators in the banking sector is bank leverage. Bank leverage refers to how resources are used in the balance sheet to finance the assets. The quality of banking assets has a significant impact on lending in banks. The proper use of bank leverage can lead to getting appropriate profit and reducing many of the bank's problems when managing the risks. Besides the internal factors, the creation of bank leverage is also influenced by the economic factors in each country. During the recent financial crisis, much attention was paid to the balance sheet balance of the banks. How to use bank leverage is one of the most important and challenging issues every bank faces. Considering the role and importance of bank leverage as the most important channel for passing on economic blockages, bank's profitability influenced by this factor has a prominent role in investment decisions. Leverage allows a financial institution to increase its potential profits and decrease its losses on a specific financial position.
For data analysis, a panel regression model based on generalized method of moments has been used by employing data during the years 2006-2016. The results show a positive and significant linear relationship between the bank leverage and the profitability. The results also demonstrate that the higher bank leverage, the more profit banks can obtain. Moreover, more analysis to determine the relationship between liquidity variables, deposits, bank size, facility ratios and inflation has been expanded. Hence, by increasing the profitability of banks, it is possible to strengthen the credibility of banks, and by increasing the credit to the economy, effective steps can be taken on employment and production in the economy.
Gholamhasan Tagi Nataj; Jamal Bahri Sales; Ghodrat Ghaderi
Volume 4, Issue 8 , June 2018, Pages 151-127
Abstract
Recently, the sharp decline in earnings per share and the sharp fall in stock prices have led to the failure of managers of investment and investor companies in this area. Therefore, this research seeks to confirm whether reinforcement of corporate governance mechanisms increases the efficiency of financial ...
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Recently, the sharp decline in earnings per share and the sharp fall in stock prices have led to the failure of managers of investment and investor companies in this area. Therefore, this research seeks to confirm whether reinforcement of corporate governance mechanisms increases the efficiency of financial performance of banks. A corporate governance system tries to maintain stakeholder rights using its tools and maximize corporate value. The main objective of this experimental study is to assess the impact of corporate governance mechanisms on the performance of the banking system, with an emphasis on the role of disclosure quality moderation. To achieve this goal, the correlation and panel regression method have been used for the period 2010 to 2016 and for selected private banks accepted in TSE as a statistical sample. The results of the research hypothesis tests show that the quality of corporate governance has a positive and significant effect on financial performance, but the disclosure quality does not have a significant impact on the interaction between the quality of corporate governance and the financial performance of banks.
Mahvash Monfared; Seyed Hesamodin Lesani
Volume 4, Issue 8 , June 2018, Pages 153-183
Abstract
Along with development in communications and economic transactions an evaluating and monitoring system is always needed. Central bank is at the summit of this matter in all countries. Unlike other banks, central banks are not commercial entities and they are responsible for doing different activities ...
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Along with development in communications and economic transactions an evaluating and monitoring system is always needed. Central bank is at the summit of this matter in all countries. Unlike other banks, central banks are not commercial entities and they are responsible for doing different activities such as determining interest rate, inflation, unemployment rate and distribution of income. Central banks' degree of independence is various among different countries; some of them are main organ of financial policies of their governments; others are completely independent from their governments and financial policies. This supervisory entity needs some Privileges to have better performance. One of the most important privileges is the central bank immunity. The immunity of central banks is not reversible by violating human rights as long as they perform their main mission in monitoring. By entering the central banks in commercial or military activities (supporting financial resources for military forces), their immunities are reversible. In recent years, we have witnessed sanctions against the Central Bank of the Islamic Republic of Iran that have disturbed all banking activities. Because of this sanction its extra-territorial and over-resolution aspects and violation of treaty obligations are illegal.
