An Analysis of the Efective Factors on Net Spread in the Banks of Iran

The Net Spread generally considered as a sign of efficiency in resource management of banks and has a crucial role in liquidity and credit risks in any Banking system around the world. This important indicator is equal to the difference in borrowing and lending rates. The main objective of this study is to analyze the effective factors on Net Spread of the state-owned banks (Melli-Sepah-Keshavarzi-Tosee Saderat- Maskan) and private banks (Saman -Eghtesad_ Novin-Parsiyan-Pasargad-Karafarin-Mellat- Tejarat-Refah-Saderat) in Iran. To measure the effects of different variables on Net Spread, independent variables were divided into two groups: macroeconomic variables such as (index of liquidity of the stock market, the total amount of transactions in the stock market and the amount of demand deposits) and the indicators related to the regulation of the banks’ supervision (such as the index of bank ownership, credit risk, liquidity risk and the marginal efficiency of capital) , then with applying the panel data method and annual data, these factor effects on the dependent variable were examined during the period of 1384 – 1392. The results of the estimated model show that among all the variables, the total amount of transactions in the stock market has the maximum, and the demand deposits have the minimum effects on Net Spread, and the index of liquidity of the stock market doesn’t have any significant effect on the dependent variable. Among the variables related to the banks’ supervision, liquidity risk, and credit risk respectively have the most and the least effect on the Net Spread, and the banks’ ownership doesn’t have any significant effect on the Net Spread. Results show that Net Spread does not differ significantly in the Private Banks and State –owned banks.The Net Spread generally considered as a sign of efficiency in resource management of banks and has a crucial role in liquidity and credit risks in any Banking system around the world. This important indicator is equal to the difference in borrowing and lending rates. The main objective of this study is to analyze the effective factors on Net Spread of the state-owned banks (Melli-Sepah-Keshavarzi-Tosee Saderat- Maskan) and private banks (Saman -Eghtesad_ Novin-Parsiyan-Pasargad-Karafarin-Mellat- Tejarat-Refah-Saderat) in Iran. To measure the effects of different variables on Net Spread, independent variables were divided into two groups: macroeconomic variables such as (index of liquidity of the stock market, the total amount of transactions in the stock market and the amount of demand deposits) and the indicators related to the regulation of the banks’ supervision (such as the index of bank ownership, credit risk, liquidity risk and the marginal efficiency of capital) , then with applying the panel data method and annual data, these factor effects on the dependent variable were examined during the period of 1384 – 1392. The results of the estimated model show that among all the variables, the total amount of transactions in the stock market has the maximum, and the demand deposits have the minimum effects on Net Spread, and the index of liquidity of the stock market doesn’t have any significant effect on the dependent variable. Among the variables related to the banks’ supervision, liquidity risk, and credit risk respectively have the most and the least effect on the Net Spread, and the banks’ ownership doesn’t have any significant effect on the Net Spread. Results show that Net Spread does not differ significantly in the Private Banks and State –owned banks.