Resilience analysis of different banking business models in COVID-19
pandemic; Evidence from Iran
- Sepideh Aghajnai,
- Reza Samizadeh
Reza Samizadeh
Alzahra University Faculty of Engineering and Technology
Author ProfileAbstract
The recent COVID-19 pandemic, which had a significant impact on
businesses in 2020 and 2021, highlighted the issue of analyzing the
financial performance of banks in times of crisis. Practical experience
has shown that banks with higher resilience perform better in different
crises. This paper studies different banking business models and
examines their resilience. In this way, by analyzing the banks'
resilience variables, their situation for different types of banking
business models is examined. Resilience in banks will be considered
through the control of risky assets and deposits, leverage rate, capital
adequacy, liquidity coverage ratio, net stable funding ratio, and
diversification. Through examining the data of 33 Iranian banks and
analyzing their different business models in a soft clustering method,
it was found that the resilience of merchandise-oriented banks has been
more than the others. Detailed analysis revealed that reducing the
investment and increasing the variety of loans would reduce the systemic
risk of the pandemic and its effect on other banks leading to an
increase in resilience.