Banking is a business of risk taking. Banks generally perform the intermediation role by accepting deposits from the savers and lending the money to borrowers. In doing so, they are exposed to various risks, which directly and/or indirectly influence their profitability (Olweny & Shipho, 2011; Sufian & Chong, 2008). Core business of banks is credit provision, from which they generate profit. In this business, credit risk is one of their primary hurdles. Boahene, Dasah, and Agyei (2012) indicated that credit quality is a fundamental indicator of any bank's financial soundness and health. Since credit creation is the main income generating activity of a bank, poor credit or loan quality contributes enormously to bank failures. The Basel Committee on Banking Supervision (2000) underscored that the major
Added over the period 2006-2018. We focused on different proxies of corporate governance indicators, such as the Directors' Effectiveness, the Transparency and the Disclosure, Responsibility. Basel Principles have been used to make corporate governance indicators and Stern & Stewart and Chew (1995) method have been used to make banking economic value added. We used the PCA method to choose important indicators. The results of PCA estimation identified ten important variables affecting banks' economic value added. Due to the importance of banks' age in creating economic value-added, banks are divided into two classes according to age. The GMM method is used to estimate the models. Eight models were designed to examine the impact of different corporate governance measures on the banking economic value added. The results indicated that corporate governance indicators were significant in explaining changes in the Iranian banking economic value added. The result also shows that according to the banks' age, the effectiveness of the board structure is greater than others. This illustrates the importance of board structure more than other criteria.
The merger of banks is one of the methods for reforming the structure of banks, which has attracted Iranian banking policymakers in recent years. In the process of merging, paying attention to its effects can help to integrate banks. In Iran's banking network, financing of production is one of the main concerns of banking policymakers. Therefore, it is important to study the effect of banks' integration on financing. In this paper, considering the importance of this issue, using the financial statements of banks in the period 2006-2018, and the Panel Data method, the effect of the merger of banks on financing has been investigated. The static method has been used to integrate banks. For this reason, banks have been considered in terms of size and health. The results of the survey indicate that the merger of small banks with large banks and the merger of healthy banks, as compared to other options, have a more positive effect on the supply of facilities.
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