Nahid Baharlou; Ali Akbar Aminbeydokhti; Mohammad Javad Mohagheghnia
Abstract
One of the main tasks of the financial institutions is to give loan to the customers. Prediction and evaluation of the credit risks due to loan and consequently managing this risk is one of the greatest ongoing challenges for the financial institutions. The main aim of this work is to provide an optimized ...
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One of the main tasks of the financial institutions is to give loan to the customers. Prediction and evaluation of the credit risks due to loan and consequently managing this risk is one of the greatest ongoing challenges for the financial institutions. The main aim of this work is to provide an optimized logistic regression model for credit scoring of real customers. Here the effects of increasing the customer’s credit classification from two (binary) to four (multinomial) distinct groups on the results of the logistic regression has been investigated. Identification of the most important parameters in prediction of the real customers’ credit scoring is the other important outcome of this work. The results of both binary and multinomial logistic regression show the relative importance of the education level and the age of the customer compared with other independent variables. The results of this work show that either increasing the number of classification types of the dependent variable, real customer’s credit, to four distinct groups has no sharp effect on the results of the optimized models or this conclusion can be due to improper distribution of the number of customers in different groups.
Hamid Kurd Bache; Somaye Jahan Mahin
Volume 12, Issue 44 , April 2012, , Pages 235-258
Abstract
Non-Pricing strategies are used by firms to increase sales, expand market share, retain existing and attract new customers. These are methods and techniques that don’t involve a change in the price of the product. The non-pricing strategies are more important for banks, because they are restricted ...
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Non-Pricing strategies are used by firms to increase sales, expand market share, retain existing and attract new customers. These are methods and techniques that don’t involve a change in the price of the product. The non-pricing strategies are more important for banks, because they are restricted in using of them. Iranian banking system has recently experienced a structural change through authorizing the establishing private banks as well as recapitalization and partial privatization of the existing commercial banks. This reform has led to more competition among banks. Therefore, the banks are seeking different strategies to spread their role in the market. Due to the policies of the central bank in setting up the same rates of deposit and loan interests for all the banks, the non-price strategies have been most importance and priority.
This paper attempts to investigate the impacts of such strategies on Iranian banks' performance using a sample of 12 commercial banks in the period of 2002-2007. We used a single-stage frontier approach. This model allows estimating firm level efficiency and the sources of inefficiency simultaneously. A super efficiency model has also been used for the sake of consistency and cross checking of the results. In order to control the effects of other determinant factors of banks' performance such as ownership status, experience, risk and market concentration, these factors are also included in the models.
The results indicate that regardless of the method used, the non-pricing strategies such as difference in products, advertising and electronic banking have improved performance of the banks over the studied sample.
Hamid Kordbacheh; Leila Pordel Nooshabadi
Volume 11, Issue 43 , January 2012, , Pages 23-51
Abstract
The purpose of this paper is to investigate the relationship between
bank ownership and prudential behavior of banks in Iranian banking
industry. Although, the relationship between bank ownership and
performance is well studied but there are few studies focusing on the
effect of ownership upon banks ...
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The purpose of this paper is to investigate the relationship between
bank ownership and prudential behavior of banks in Iranian banking
industry. Although, the relationship between bank ownership and
performance is well studied but there are few studies focusing on the
effect of ownership upon banks lending and prudential behavior (Jia
2009). This paper as the first study over Iranians banking system is to
tackle this subject using a panel of 12 banks over 2002 – 2008. To this
aim the main determinants of prudential behavior as control regressors
are considered to provide a much more accurate model to describe the
relationship between the prudential behavior and ownership structure
of banks. The findings of the study provide the strong evidence to
conclude that the lending by states–owned banks has been less prudent
than lending by private banks. Furthermore, the results of this study
show that the larger banks tend to be more prudent than the smaller
ones. Moreover, the results indicate that the less market concentration
in Iranian banking industry and the more GDP growth lead to the less
prudential behavior. The results also show that the higher percentage
of loans in arrears results in the more prudential behavior. Last but not
least, the findings of this research show that lending by state–owned
banks is becoming more prudent indicating the positive effects of the
reforms of Iranian banking system over the last decade.
Reza Talebloo
Volume 11, Issue 43 , January 2012, , Pages 75-98
Abstract
Deposit insurance is a type of shelter for banks depositors. The main
purpose of this system is stabilization of financial market and
providing a situation that small and fragile bank and deposit
institutions can survive in credit market. Appropriate pricing of
deposit insurance rate is necessary ...
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Deposit insurance is a type of shelter for banks depositors. The main
purpose of this system is stabilization of financial market and
providing a situation that small and fragile bank and deposit
institutions can survive in credit market. Appropriate pricing of
deposit insurance rate is necessary for realization of this goal. In this
paper we use Merton option pricing model for estimating deposit
insurance rate of some Iranian private banks. For this purpose, first,
banks asset value and its variance that are unobserved, were estimated
with specification of maximum likelihood function. Then deposit
insurance price of each bank based on their risks were calculated. We
found banking deposit insurance premium and risk are growing. In
some years, estimated deposit insurance premium unusually was very
high. This fact can be due to two events: first ratio in this year was
high, which means debt to equity ratio was high. Secend, banks value
variance were high. Other finding of this study is that deposit
insurance premium of Iranian banks are different. This fact shows that
these banks have different risk levels so, with respect to differences in
deposit insurance premium of each bank, this paper recommends that
deposit insurance system in Iran should be based on their risk levels.
