Optimizing the Bank Melli Credit Portfolio Using the Cost Reduction Approach

One of the essential steps that the banking system needs to take for achieving the objectives of national economy is to provide facilities and, in other words, manage credit portfolio in order to reduce the risks, decrease the overall cost of facilities, prevent the freeze of resources, and employ up to date international standards. Accordingly, in this paper, the optimization of the credit portfolio of Melli Bank has been investigated over the period of 2014-2018 using by minimizing the risk of expected output. The results show that during the period under investigation, the Bank Melli has acted as a risk tolerant agency and the trend of facility shares, in almost all periods, has been compatible with the optimized correlation of risk and output; that means, during the periods of high risk levels, Bank Melli has allocated more facilities to the economic section in order to gain a better output. Also, in order to reduce the cost of given facilities during the period under review, it was better for Bank Melli to pay its given facilities in a way that would account for 43% of industry, 31% of services, 27% of construction.