A Case Study of Bank Melli Iran Branches in the West Azarbaijan Province of Iran

The purpose of this study is to investigate the relationship between risk-taking behavior and performance of Bank Melli Iran branches located in the West Azerbaijan province of Iran. The performance is measured by the profitability index، i. e. profit-to-income ratio in the Bank Melli Iran branches of the West Azerbaijan province. The research data covers all the branches in the area within a six-year period، from 2005 to 2010. A couple of models were formulated to depict the relationship. The individual risk-taking behavior was taken as the independent variable in the first model while and the organizational risk-taking was the independent variable of the second one. Meanwhile، the age and educational degrees of the branch managers، staff number of the branch، balances of facilities and deposits as well as the percentage of the pending collections were considered as the controlling variables. Findings illustrated that both individual and organizational risk-taking behavior of the bank managers positively and significantly affect the performance of bank branches in a linear way. The controlling variables of “age” (in the first model) and “pending collections percentage” (in the second model) were omitted due to high regression coefficient regression. Other controlling variables indicted a positive relationship between “balances of facilities and deposits” and the “profit-to-income ratio”. Yet، the results asserted a negative and meaningful relationship between the number of staff and the managers'' educational degrees from one side and the profitability index used in this research from the other side.