Explanation Of The Effect Of Macroeconomic Variables On Profitability Of Banking Industry
Macroeconomic conditions and interventions of government and central bank in economy together with business
cycles can stimulate profitability of banks. Therefore, according to the highlighted role of banks in national economy,
evaluation of their performance can be of great significance. Profitability is one of the factors contributing to the
performance of banks. In these circumstances, estimation of an appropriate economic model which uses previous
information helps a better understanding from the relationship between macroeconomic variables and profitability of banks.
Hence, in this paper, using macroeconomic variables, profitability of Iranian banks has been explored. This is an applied
research and method used in it is descriptive statistics including dispersion and central index and inferential statistics
including univariate linear regression and Pearson correlation test. Statistical population of the research is comprised of nine
banks which are in Tehran Stock Market during 2009-13 and data corresponding to financial reports of banks and central
bank as well as exchange market organization are collected and analyzed. Results obtained from data which investigate the
effect of macroeconomic variables on the profitability of banking industry in Iran through one main and four secondary
hypotheses reveal that overall index of shares price (TEPIX) and GDP have significant relationship with profitability and
predictability of banking industry. However, unemployment rate and index of shares prices in Tehran Stock Market have no
significant relationship with profitability and predictability of banking industry. According to results of the research, it is
suggested that economic policy making systems can act for stable decision making on monetary and capital market field for
the sake of achieving profitability increase, private investment and employment and accordingly, economic growth and
development and underlie for maintaining banks and investors interests and support them through appropriate management
of economic shocks..
Keywords- macroeconomic variables, price index, index of stock market price, unemployment rate, GDP.