Predicting the Profitability of Iranian Banks

Habibzade,  Malihe; Khalifehsoltani , Ahmad; Soleimany Amiry, Gholamreza

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year 16, Issue 62 (2025)

fa 2025, 16(62): 101-90

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Predicting the Profitability of Iranian Banks

Malihe Habibzade ^*¹

, Ahmad Khalifehsoltani¹

, Gholamreza Soleimany Amiry¹

1- Department of Accounting, Alzahra University, Tehran, Iran.

Abstract: (7 Views)

Profit, as one of the most important indicators for measuring the performance of an economic unit, is one of the important accounting topics, which has gained a high position due to the fierce competition environment and the importance of quick and appropriate decision-making by managers. Therefore, it is very important to analyze the mentioned index, its influencing factors and predict profitability. Banks, as economic enterprises, seek to earn profit, and at the same time, they can play an important role in the growth and development of the country. The profitability of banks is influenced by internal and environmental variables. Internal factors are under the control of the bank's management and reflect differences in the bank's management policies, resource allocation, asset portfolio management, and capital adequacy. In this regard, in the present research, the number of 30 banks for the period from 2012 to 2014 based on the basic information of the banks' financial statements; The effect of 22 variables (taken from Kamels model (1979)) in predicting the profitability of banks was examined. C5 decision tree technique was used to determine significant variables in predicting profitability due to the high ease of understanding the model. Finally, after determining the effective variables and identifying 9 variables, the accuracy of predictions was also measured using this technique. The results of the research indicated that the bank profitability prediction model, considering significant variables, and using the C5 decision tree algorithm, has an accuracy of 93.54%. Considering the acute conditions of inflation in Iran's economy and the high inflation expectations, the management of the banks take the initiative in increasing their expected profit and adjust their interest rate according to the expected inflation, and this leads to a positive effect on the banks' profitability.

Article number: 6

Keywords: Forecasting, Profitability, Banks, Macroeconomic Criteria, C5 Decision Tree.

Full-Text [PDF 695 kb] (7 Downloads)

Type of Study: Research | Subject: Special

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Habibzade M, Khalifehsoltani A, Soleimany Amiry G. Predicting the Profitability of Iranian Banks. fa 2025; 16 (62) : 6
URL: http://qfaj.mobarakeh.iau.ir/article-1-2761-en.html

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