A Model for Assessing the Financial Strength of the Iranian Banks

• Main Authors: Mohamadjavad Salimi, Payam Hanafizade, Abolfazl Jafari
• Format: Article
• Language: fas
• Published: Alzahra University 2017-08-01
• Series: راهبرد مدیریت مالی
• Subjects: Assessing; Bank; Financial Strength; Model
• Online Access: http://jfm.alzahra.ac.ir/article_2872_dd606a2388716276df6fc1ab40a3d819.pdf

One of the main problems in the Iranian Banking industry is lake of a comprehensive and native model for assessing financial strength of Iranian banks. So the aim of this study is to develop a model to meet this problem. Banks financial strength deal with banks inherent safety and soundness. To design and develop the model, an initial conceptual model was developed by extensive study of various dimensions, factors and indicators of assessing banks financial strength and extraction of widely used of them. Then, this conceptual model validated and localized at three steps. In the first step, content validity of the model was tested by expert panel and some modifications was made in the model. In the second step, construct validity of the model was tested based on opinions of expert panel formed of faculty members, managers and experts in the field of banking and related capital market financial analysts. Finally in the third step, reliability of the model was tested. The final model which is constructed from 4 dimensions, 8 factors and 51 indicators can be used as a native and novel model for assessing the financial strength of Iranian banks. The results show that the dimension of financial position with weight of 32 percent has the most contribution in reflecting Iranian banks financial strength. After that, the competitive position, the management position and the risk position with weights of 26, 25 and 16 percent, respectively have next ranks.