The Effect of The Relationship between Financial Performance and Financial Stability of Listed Banks in Tehran Stock Exchange

The determinants of banks' profitability and performance in the literature have been investigated in this study in a large and detailed way. However, there is little study about the banking sector and in emerging markets. In this paper, an analysis was conducted to determine the internal factors affecting the performance of banks in Iran using the spatial data during 2011-2016. In this research, the relationship between bank performance and financial firmness in eleven banks accepted in Iran's stock exchange and farabourse has been investigated using panel data regression. In the case of the deferred loan ratio variable, it can be seen that this variable has a negative relationship with the rate of return of the shareholders. Also, the bank's liquidity level and interest margin to gross income also have a negative relationship. As a result, in order to increase profitability, banks must take care of the quality of the loans they grant.