Measuring the Impact of Market Share and Number of Branches on the Banks Profitability

This paper aims to examine the impact of the banks market share and the number of branches on the  selected banks profitability of  Iran. To this end, data  and information of 11 selected banks  during  the period of 2007- 2015 were extracted from the  central bank  database and their balance sheets and the considered model was estimated using panel data method. In this study, two indicators namely the return on equity and return on assets were used as  proxies for profitability variables and hence two separate models were estimated. The  results of models estimation show that the ratio of loans to total assets, number of branches, economic growth and banks market share have positive  and significant impacts on the  banks profitability. The effect of operating costs to total assets on banks profitability was negative and statistically significant at the 5% significance level. Financial leverage has positive impact on the  banks profitability, but it is not  statistically significant at the5%  significance level.