The Impact of Capital Ratio on Iranian Banking Profitability (1380-1388) (in Persian)

Mahshid Shahchera and Nasim Jozdani ()
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Mahshid Shahchera: Iran
Nasim Jozdani: Iran

Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), 2012, vol. 4, issue 12, 19-44

Abstract: This study investigates factors affecting the profitability of private and state banks using panel data over the period (2001-2009), based on the generalized method of moments (GMM).Return on equity is dependent variable and explanatory variable included loan to total asset, capital ratio and cost ratio. Concentration index and the Business Cycle as instrumental variables for dynamic panel data method (DPD) have been used. Capital ratio squared can be used in our model and the coefficients of these variables are significant. The liquidity to total assets, deposits ratio and loans to total asset have an inverse relationship. There are significant negative correlation between the cost ratio and profitability banking system in Iran. According to results business cycles and profitability have positive and significant relationship.JEL Classification: G32, G21

Keywords: Profitability; Capital Ratio; Banking System; Dynamic Panel Data (search for similar items in EconPapers)
Date: 2012
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