Explaining the Relationship Pattern between Risk Management and Financial Performance of Banks

Subject Areas : Mathematical Methods in Financial, Physical, Biological, Social, and Behavioral Sciences.

Gholam abbas taghian ¹ , Seyedeh Mahboobeh Jafari ² , Mohsen Hamidian ³

1 - Department of accounting,Kish Iternational Branch,Islamic Azad University,Kish Island,Iran
2 -
3 - دانشیار گروه حسابداری، دانشکده اقتصاد و حسابداري دانشگاه آزاد اسلامي واحد تهران جنوب، تهران، ايران

Received: 2024-08-12 Accepted : 2024-11-23 Published : 2024-08-04

Keywords: Risk, Risk Management, Survey Approach, Poison Approach, Quantitative Approach,

Abstract :

In recent years there were companies such as banks which have used the value of quantitative analysis concerning operational information to evaluate the amount of risk as well as the risk involved in operating in some areas such as lending. Although risk management implementation may not specifically change the level of organizational risk, it is likely to affect the actual measurement and monitoring of risk across the company. As a result of targeting specific levels of risk, companies are likely to reduce performance-related volatility fluctuations while reducing the level of realization of their business goals and objectives, which include generating profits and increasing shareholder wealth. The purpose of this research is to explain the relationship between risk management and financial performance in banks. Risk management in banks has been used in this study using four methods of qualitative (artificial) evaluation, rating assessment, maturity level attitude and quantitative attitude. The first three cases were field research and expert opinion polls and the last was the financial information of 21 banks listed on the Tehran Stock Exchange during the period 2013 to 2019. The purpose of this research is applied research and correlation analysis and regression are used in the analysis of relationships. The results of estimating the relationship between quantitative risk management with banks' financial performance showed a direct relationship between risk management and adjusted return on assets.

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