Document Type : Research Paper
Abstract
In the recent decades, in developing countries, economic growth has been so important. Existence of a well-function financing systems is crucial for investment in different parts of economy. Financing systems can facilitate countries economic growth, by concentrating, scarce resources and funds for large investments. Due to key role of banks on financing systems and significant effect of profitability on operation of them, studying about influencing factor on banks profitability has so importance. It’s worthwhile to note, greater profitability not only allows the bank to create funds to grant greater credits but also facilitates investment on risky environment for regulators of banks. Due to the provided explanation, in this research, influencing factors on banks profitability was investigated. It’s also worthwhile to note, Return on Equity (ROE) was used as the index of profitability. Sample of study encompasses 15 banks in the period of 2006-2015 for 10 years. Liner regression model with combination approach was used. Based on literature, influencing factors are divided in two groups: The first group encompasses bank-specific factors and the second one encompasses factors related to industry structure and macro-economic environment. Results indicated that assets structure, revenue diversification, economic growth and inflation have positive relation with bank profitability while capitalization, financial structure, size, bank competition and interest rate have negative relation with bank profitability.
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