The Impact of Off-Balance-Sheet Activities on the Risk of Banks in Tehran Stock Exchange

Abstract

This study examines the effect of off-balance sheet activities on three levels of total risk, bankruptcy risk and credit risk in state owned banks, private banks and all banks during 2005 to 2015 in Iran. For this purpose, we used the multivariate regression method by using panel data model and the Eviews software. The results show that off-balance sheet activities have a significant and negative effect on total risk in state-owned banks. Also, off-balance sheet activities leads to increase in the total risk in private banks based on the return on assets as dependent variable. Further, results indicate that relationship between offbalance sheet activities and credit risk and bankruptcy risk is statistically significant and negative in state owned banks