A financial ratio analysis of performance evaluation of banking lndusty in iran

This paper investigates the performance evaluation of Iran’s commercial banking sector for the period 2007- 2011. Financial ratios are employed to measure the profitability, liquidity and quality performance of public and private commercial banks in Iran. In this study a large bank was selected in both, public and private sectors. For measuring profitability three ratios such as Return on Assets (ROA), Return on Equity (ROE) and Cost to Income Ratio (C/I) were selected and in the account of liquidity three ratios were be used as follow: Liquid assets to deposit-borrowing ratio (LADST), Net Loans to total asset ratio (NLTA) 535 and Net loans to deposit and borrowing (NLDST). The study found that private bank has low liquidity as compare to public bank; however the profitability of private bank is more than public bank. In account of human resources utilization, the study indicates private bank much better than public bank. Finally, the study reveal private bank has better erformance as compare to public banks