Financial Sustainability Assessment under Economic Uncertainty in Iranian Banking Industry: An Importance-Performance Approach

Document Type : Research Paper

Authors

1 PhD Candidate, Department of Financial, Maragheh Branch, Islamic Azad University, Maragheh, Iran.

2 Assistant Prof., Department of Economics, Maragheh Branch, Islamic Azad University, Maragheh, Iran.

3 Associate Prof., Department of Accounting, Bonab Branch, Islamic Azad University, Bonab, Iran.

10.22059/frj.2025.377710.1007610

Abstract

Objective
Given the significant changes in the overall economic conditions, the issue of economic uncertainty, and consequently the increase in risks within the economic system, has become increasingly important in Iran. For this reason, researchers and policymakers have focused on the financial consequences arising from these economic changes. Nevertheless, a gap remains in achieving a balance necessary for financial stability amid economic uncertainty. As the key players in the money market, banks hold a vital role in the country’s economy. Considering the importance of the banking industry in times of economic instability and its impact on the economy and society, it is essential for bank managers to have sufficient awareness about the effects of financial sustainability on profitability in the country's banking industry. In this context, the present research aims to assess financial sustainability under conditions of economic uncertainty in the Iranian banking industry.
 
Methods
The present study is applied-developmental in terms of its objective and, regarding data collection methods, employs a cross-sectional survey using an exploratory mixed-methods approach. The qualitative phase involved bank managers and deputies as participants. The sampling method for this phase was theoretical sampling, achieving theoretical saturation with 10 participants. The statistical population for the quantitative phase consisted of banking industry experts, estimated at 384 individuals based on Cochran's formula. The required sample size was obtained using a simple cluster random sampling method. Data were collected using semi-structured interviews and questionnaires. The underlying categories of financial stability were identified using the grounded theory method, and the status of the research constructs was assessed via importance-performance analysis (gap analysis). Qualitative data analysis was conducted using MAXQDA software, while the quantitative analysis was performed with SPSS.
 
Results
Based on the research paradigm model, it was determined that organizational and customer-oriented factors, along with financial policies, influence the financial stability of banks. The bank’s social responsibility provides the necessary foundation, while economic uncertainty acts as an intervening factor that significantly affects the formulation of a sustainable banking strategy. Ultimately, the sustainable banking strategy leads to economic, social, and environmental sustainability.
 
Conclusion
According to findings, causal conditions, including organizational factors, customer-centric factors, and financial policies, influence the core phenomenon of banking financial sustainability. Additionally, contextual conditions, namely the social responsibility of the banking industry, provide the essential environment and foundation for achieving financial sustainability goals. While contextual conditions have a positive impact, intervening conditions, such as economic uncertainty, negatively influence strategies and actions, particularly the sustainable banking strategy. Ultimately, a sustainable banking strategy leads to outcomes including environmental, economic, and social sustainability. Based on the results of the extracted model, it is suggested that banks should prioritize the development of sustainable banking strategies and concurrently implement programs to enhance their social responsibility.

Keywords

Main Subjects

References

 
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Financial Research Journal
Volume 27, Issue 3
2025
Pages 597-631

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