Document Type : Original Article
Authors
1
PhD Candidate in Economics, Faculty of Management and Economics, Sciences and Research Branch, Islamic Azad University, Tehran, Iran
2
Professor of Economics, Faculty of Economics and Political Science, Shahid Beheshti University, Tehran, Iran,
3
Associate Professor of Economics, Faculty of Economics, Allameh Tabataba'i University, Tehran, Iran,
4
Associate Professor of Economics, Faculty of Management and Economics, South Tehran Branch, Islamic Azad University, Tehran, Iran,
10.22075/jem.2026.39622.2055
Abstract
The shock of international sanctions has been one of the most serious challenges to the stability and profitability of Iran's banking system over the past decade. This study aims to investigate the heterogeneous effect of this shock on the profitability of Iranian banks and analyze their conditional resilience using the quantile regression method. To this end, annual panel data from 19 banks over the period 2011–2023 were collected, and the model was estimated at five quantiles (0/1, 0/25, 0/5, 0/75, and 0/9). The results confirm significant heterogeneity in banks' responses. While the sanctions shock had no significant impact on the profitability of low-profit and median banks, highly profitable banks experienced a significant 0/54% increase in profitability, indicating their higher level of resilience and adaptive capacity in the face of external shocks. Furthermore, asset efficiency was identified as the strongest internal factor positively influencing profitability across the entire conditional distribution. The findings carry important policy implications. The primary recommendation is to adopt a differentiated regulatory approach based on the risk and resilience level of each bank. For low-profit banks, mandatory strengthening of capital buffers and active asset quality management should be prioritized. For resilient, high-profit banks, incentive-based frameworks can be designed to foster interbank market development and income diversification. At the macro level, enhancing transparency, improving data governance, and formulating sanctions shock scenarios to assess systemic resilience are deemed essential.
Keywords
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