Non-Interest Income, Profitability and Risk in Banking Industry

Subject Areas : Labor and Demographic Economics

Amir Ali  Farhang ¹ (دانشجوی دکتری دانشگاه پیام نور تهران)
Abolghasem  Esna Ashari ² (دانشیار اقتصاد دانشگاه پیام نور تهران)
Asghar  Abolhasani ³ (دانشیار اقتصاد دانشگاه پیام نور تهران)
Mohammad Reza  Ranjbar Fallah ⁴ (استادیار اقتصاد دانشگاه پیام نور تهران)
Jahangir  Biabani ⁵ (استادیار اقتصاد دانشگاه پیام نور تهران)

Received: 2017-01-08 Accepted : 2017-01-08 Published : 2016-10-22

Keywords: G32, Profitability, E44, JEL Classification: C36, G21. Keywords: Non-Interest Income, Banking risk, SGMM,

Abstract :

The aim of this study is evaluating the effect of non-interest income on the risk and profitability of the banking industry by using systematic GMM during 1384 to 1393. The findings show that the increase of non-interest income results in the increase of profitability and the decrease of risk in Iran's banking system and there is a significant positive relationship between the concentration index and bank risk in such a way that the increase of concentration index results in increase of banks' risks. On the base of the research results and current problems of Iran's banking system, paying attention to banks' money making ability through non-interest income can be considered as a major solution.

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