Analysis of Altman's Model to Investigate Factors Affecting the Probability of Bankruptcy of Selected Banks in Iran
One of the basic requirements for sustainable growth and development is the existence of an efficient financial sector to finance production activities. In this regard, the present study has estimated the probability of bankruptcy of banks employing the Altman index and using evidence from the banki...
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| Format: | Article |
| Language: | fas |
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Allameh Tabataba'i University Press
2022-06-01
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| Series: | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| Subjects: | |
| Online Access: | https://joer.atu.ac.ir/article_15537_a2096b0dc386550c9130b94844ff2b23.pdf |
| _version_ | 1827398282525016064 |
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| author | Akbar Bagheri Hasan Abagheri |
| author_facet | Akbar Bagheri Hasan Abagheri |
| author_sort | Akbar Bagheri |
| collection | DOAJ |
| description | One of the basic requirements for sustainable growth and development is the existence of an efficient financial sector to finance production activities. In this regard, the present study has estimated the probability of bankruptcy of banks employing the Altman index and using evidence from the banking industry for 18 public and private banks in the period from 2016 to 2021. Using the panel data approach, the influencing factors in the probability of bankruptcy are also investigated. Estimates from the panel approach show that credit diversification is effective in reducing the probability of bankruptcy. Similar evidence shows that the probability of bankruptcy for private banks is equal to 68% and for public banks 70%. The calculation of the Herfindahl-Hirschman concentration index has also shown a value of 0.33 for Iran's private banks and 0.63 for state banks, so credits in private banks have a higher diversity than in state banks. According to the results of the research, more attention should be paid to diversifying credits in public and private banks, determining the optimal size of banks to take advantage of economies of scale, monitoring the central bank's compliance with Basel index standards and monitoring the maintenance of banks' cash balances for the unforeseen demand of the society. |
| first_indexed | 2024-03-08T19:26:21Z |
| format | Article |
| id | doaj.art-45e87b89540744c2a02aa795e4d567ea |
| institution | Directory Open Access Journal |
| issn | 1735-210X 2476-6453 |
| language | fas |
| last_indexed | 2024-03-08T19:26:21Z |
| publishDate | 2022-06-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| spelling | doaj.art-45e87b89540744c2a02aa795e4d567ea2023-12-26T08:04:33ZfasAllameh Tabataba'i University PressFaslnāmah-i Pizhūhish/Nāmah-i Iqtisādī1735-210X2476-64532022-06-01228518921310.22054/joer.2023.72119.111315537Analysis of Altman's Model to Investigate Factors Affecting the Probability of Bankruptcy of Selected Banks in IranAkbar Bagheri0Hasan Abagheri1Assistant Professor, Department of Economics, Islamshahr Branch, Islamic Azad University, Islamshahr, IranPh.D. Student in Financial Engineering, Islamshahr Branch, Islamic Azad University, Islamshahr, IranOne of the basic requirements for sustainable growth and development is the existence of an efficient financial sector to finance production activities. In this regard, the present study has estimated the probability of bankruptcy of banks employing the Altman index and using evidence from the banking industry for 18 public and private banks in the period from 2016 to 2021. Using the panel data approach, the influencing factors in the probability of bankruptcy are also investigated. Estimates from the panel approach show that credit diversification is effective in reducing the probability of bankruptcy. Similar evidence shows that the probability of bankruptcy for private banks is equal to 68% and for public banks 70%. The calculation of the Herfindahl-Hirschman concentration index has also shown a value of 0.33 for Iran's private banks and 0.63 for state banks, so credits in private banks have a higher diversity than in state banks. According to the results of the research, more attention should be paid to diversifying credits in public and private banks, determining the optimal size of banks to take advantage of economies of scale, monitoring the central bank's compliance with Basel index standards and monitoring the maintenance of banks' cash balances for the unforeseen demand of the society.https://joer.atu.ac.ir/article_15537_a2096b0dc386550c9130b94844ff2b23.pdfdiversification of facilitiesprobability of bank bankruptcyz-score indexiran |
| spellingShingle | Akbar Bagheri Hasan Abagheri Analysis of Altman's Model to Investigate Factors Affecting the Probability of Bankruptcy of Selected Banks in Iran Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī diversification of facilities probability of bank bankruptcy z-score index iran |
| title | Analysis of Altman's Model to Investigate Factors Affecting the Probability of Bankruptcy of Selected Banks in Iran |
| title_full | Analysis of Altman's Model to Investigate Factors Affecting the Probability of Bankruptcy of Selected Banks in Iran |
| title_fullStr | Analysis of Altman's Model to Investigate Factors Affecting the Probability of Bankruptcy of Selected Banks in Iran |
| title_full_unstemmed | Analysis of Altman's Model to Investigate Factors Affecting the Probability of Bankruptcy of Selected Banks in Iran |
| title_short | Analysis of Altman's Model to Investigate Factors Affecting the Probability of Bankruptcy of Selected Banks in Iran |
| title_sort | analysis of altman s model to investigate factors affecting the probability of bankruptcy of selected banks in iran |
| topic | diversification of facilities probability of bank bankruptcy z-score index iran |
| url | https://joer.atu.ac.ir/article_15537_a2096b0dc386550c9130b94844ff2b23.pdf |
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