Univrsity Of Tehran Press Financial Research Journal 1024-8153 15 2 2013 10 23 Determining the Relationship between Credit Risk & Profitability in Iranian Banks Determining the Relationship between Credit Risk & Profitability in Iranian Banks 229 246 51079 10.22059/jfr.2013.51079 FA Saeed Shavvalpour Assistant Prof., Research Institute of Petroleum Industry (RIPI), Tehran, Iran Elham Ashari M.Sc., Financial Management, Management and Accounting Faculty, Tehran, Iran Journal Article 2012 12 23 In this paper we analyze the relationship between credit<br />risk & profitability in Iranian banks. The credit risk is measured by<br />non-performing loans ratio &loan loss provision ratio. Also, the<br />profitability has been measured by return on assets &return on equity.<br />The survey data are from fifteen Iranian banks& credit institutes<br />during the time period of 2003 to 2009.Results show that there is a<br />significant negative relationship between credit risk & profitability. In<br />other words, the increase in credit risk results in the increase in the<br />costs of banks and therefore the decrease in their profibility. The<br />results also imply that bank managers need to focus on monitoring and<br />controlling the credit risk in order to maximize their profit. In this paper we analyze the relationship between credit<br />risk & profitability in Iranian banks. The credit risk is measured by<br />non-performing loans ratio &loan loss provision ratio. Also, the<br />profitability has been measured by return on assets &return on equity.<br />The survey data are from fifteen Iranian banks& credit institutes<br />during the time period of 2003 to 2009.Results show that there is a<br />significant negative relationship between credit risk & profitability. In<br />other words, the increase in credit risk results in the increase in the<br />costs of banks and therefore the decrease in their profibility. The<br />results also imply that bank managers need to focus on monitoring and<br />controlling the credit risk in order to maximize their profit. https://jfr.ut.ac.ir/article_51079_f41c0790be53038682a85cbee5f025b2.pdf