Modeling Conditional Distribution of Profitability at Banks: Evidence from Iran

Document Type : Original Article


1 PhD Student/Candidate in Economics, Science and Research Branch, Islamic Azad University of Tehran, Tehran, Iran

2 Professor, Department of Economics, Shahid Beheshti University, Tehran, Iran (corresponding author)

3 Associate Professor, Department of Economics, Allameh Tabataba’i University, Tehran, Iran

4 Assistant Professor of Islamic Azad University Tehran Branch



Profitability has always been a major goal of banks operating as businesses and suppliers of banking resources. However, their probability is constantly affected by specific and structural factors as well as periods of prosperity and recession. Accordingly, the panel data quantile regression method was employed in this paper to estimate cyclic, structural, and specific factors affecting profitability at 20 banks and credit institutes listed in the Tehran Stock Exchange (i.e., Bank Mellat, Bank Saderat Iran, Tejarat Bank, Tourism Bank, Karafarin Bank, Shahr Bank, Sina Bank, Sarmayeh Bank, Saman Bank, Refah Bank, Resalat Bank, Bank Day, Middle East Bank, Melal Bank, Post Bank of Iran, Pasargad Bank, Parsian Bank, Ayandeh Bank, Iran Zamin Bank, and Eghtesad Novin Bank) during 2009–2022. The results indicated that the conditional distribution of profitability was affected by cyclic, structural, and specific factors at banks. In fact, the shocks of these factors had symmetric and asymmetric effects on the conditional distribution of profitability. Generally, the ratio of noncurrent liabilities (i.e., a specific banking factor) had the greatest effect on the conditional distribution of profitability at the TSE-listed banks. The second most effective factor was the centralization degree (i.e., a structural factor), whereas liquidity growth and economic growth were the cyclic factors classified as the third and fourth most effective factors, respectively.


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