Examining the Effects of Healthy Banking Indicators in Determining the Asset-Liability Management (ALM) Strategy by Focusing on Capital Adequacy Ratio (CAR) Index

Subject Areas : Journal of Investment Knowledge

Mohammad Hossein Setayesh ¹ , Mohammad Hossein Fatheh ²

1 - Professor of shiraz university
2 - Instructor, Department of Accounting, Faculty of Management, Economics and Accounting, Payame Noor University, Iran. Phd. Student of Accounting, Shiraz University, (Corresponding Author)

Received: 2017-04-21 Accepted : 2017-08-15 Published : 2017-12-22

Keywords: asset-liability management, indicators of healthy banking, Capital Adequacy,

Abstract :

The aim of the present study is to examine the impact of healthy banking indicators in determining the asset-liability management (ALM) strategy. In order to achieve this objective, 20 bank branches with specific considerations were studied between 2009 and 2014. Pearson correlation and multivariate regression model were used to analyze the data. The bank size (bank balance and trade volumes) was considered as the asset/liability index, and the indicators of a healthy banking system such as asset quality, management (efficiency), profitability and liquidity were considered as independent variables. The results of this study suggest that indicators of capital adequacy, return on assets and return on capital have a positive and significant impact on asset and liability management. Management (efficiency) and liquidity indexes showed no significant effects.

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