Investigating the relationship between liquidity and credit risk on stock returns in banks admitted to the Tehran Stock Exchange

This research was conducted with the aim of investigating the relationship between liquidity and credit risk on stock returns in banks admitted to the Tehran Stock Exchange. This research is practical in terms of purpose. The method of this research is multivariate correlation and regression and the library method was used to collect data and information. Research data, through data collection of selected companies by referring to the audited financial statements, the annual report of the board of directors to the assembly, the company's activity report, the stock exchange monthly and the Kodal website and using software The existing one is done. The required data has been collected using existing databases and software, and data analysis has been done using EXCEL and EVIEWS software. The results showed that credit risk can have a negative effect on banks' stock returns. Credit risk indicates the bank's ability to repay debts on time and in an estimated manner or the correct output of the relevant accounting methods. The occurrence of credit risk may cause a decrease in confidence and capital attraction from investors and depositors. As a result, banks may face liquidity problems and decrease in financial resources, which can lead to a decline in bank stock prices and ultimately low returns. In addition, the occurrence of credit risk may lead to a decrease in public trust in the bank and an increase in the probability of non-payment of debts. This can cause a decrease in the bank's stock price and loss of shareholder value. On the other hand, the occurrence of liquidity risk can lead to a decrease in the bank's liquidity, and as a result, the bank may face problems such as reducing the ability to provide financial resources and limitations in providing loans. These issues can have a negative impact on the bank's stock returns and shareholder value. In addition, the occurrence of liquidity risk may reduce public trust in the bank. Depositors and investors may lose confidence in the bank and, as a result, the return on the bank's stock will decrease. As a result, liquidity risk can have a negative effect on banks' stock returns. Proper management of liquidity, the ability to provide financial resources in different market conditions and maintaining public trust can be very important to reduce this risk and increase the yield of banks' shares.