The relationship between credit risk & liquidity risk and banks profitibility

zohreh dinashi¹

1) MA in accounting- Islamic Azad university- North branch

IOI Code : XYCK-AEEKC
Publication : International Conference on Management and Humanities(icmhconf.com)
Abstract :
    Country’s financial system has a very important role in health, growth and success. Market and financial institutions as intermediary agencies, play an important role in the supply, mobilization and allocation of financial resources. The recent crisis facing the banking system, due to the increase in non – performing loans and lack of liquidity, has become a national challenge. Banks and financial institutions looking for investment and lending, will have to assume the risk that affected the repayment of loans or deposits. For most banks, loans are the largest and most obvious source of credit risk. A recent research study the relationship between bank’s credit risk and liquidity risk with profitability, listed in Tehran stock exchange. The sample consisted of 13 banks and 65 observations during 1388-92. Three indicators are set for each independent variable and control variable and control variables defined. SPSS statistical analysis software was used. The results shows that the impact of bad debts to loans, total loans to total deposit and long deposit to total asset indicators, is significant inverse and the total loan to total asset indicator is significant direct.

Keywords : credit risk liquidity risk profitibility