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:: year 19, Issue 68 (9-2026) ::
JMBR 2026, 19(68): 381-416 Back to browse issues page
Modeling the Heterogeneity of Factors Affecting Bank Profitability: Evidence from Iran
Vahid Shabani1 , Kambiz Hojabr Kiani *2
1- Researcher at the Central Bank of the Islamic Republic of Iran, Department of Inquiry and Qualification Assessment
2- Professor of Economics, Faculty of Economics and Political Science, Shahid Beheshti University, Tehran, Iran.
Abstract:   (356 Views)
Bank profitability is influenced by a complex set of internal and external factors, the effects of which can vary fundamentally across banks with different performance levels. This heterogeneity in Iran's banking system necessitates the application of methods capable of uncovering these state-dependent patterns. This study aims to investigate the heterogeneity in the effects of intra-organizational and extra-organizational factors on the profitability of Iranian banks and to analyze these effects within the framework of conventional financial theories. The research employs a descriptive-analytical method. Data from 20 banks and credit institutions listed on the Tehran Stock Exchange over the period 2011–2023 were analyzed using a panel quantile regression approach. The findings indicate that the impact of the explanatory variables on profitability is highly heterogeneous across different points of the conditional distribution. Specifically, non-performing loans exert a strong negative effect on low-profitability banks, while this effect is not significant for high-profitability banks. Liquidity growth has a positive and increasing effect on the profitability of high-profitability banks. Moreover, operating costs show a significant negative effect across all profitability levels, and market concentration exhibits a positive effect only on the profitability of banks located in the middle quantiles. Analyzing these results in light of theories such as asymmetric information, monetary transmission, and market structure reveals that the roots of heterogeneity lie in the institutional differences among banks. Consequently, a one-size-fits-all policy approach is not only ineffective but may also exacerbate existing inequalities. Therefore, designing flexible, risk-based regulatory and policy mechanisms that respond appropriately to the specific conditions of each bank group is deemed essential.
Full-Text [PDF 1534 kb]   (64 Downloads)    
Type of Study: Empirical Study | Subject: Financial Institutions and Services (G2)
Received: 2025/12/13 | Accepted: 2026/06/9 | Published: 2026/06/23
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فصلنامه پژوهش‌های پولی-بانکی Journal of Monetary & Banking Research
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