An Analysis of the Effect of the reduction of the Profit Rate in the Mining and Industry Sector on Profitability of Sana’t & Ma’dan Bank

In this research, the effect of decreasing the profit rate during 2003-2010 in the mining and industry sector on profitability of Sana’t & Ma’dan Bank was studied. Determining whether interest rates have affected profitability of banks, and, consequently, determining whether bank managers have been able to reduce the effect form this paper’s goals. The answer to research question was developed through calculation of interest indexes in five groups: (1) average output for shareholders, (2) average output of assets, (3) the incomes related to profitable properties resulted from banking interests to the average of these assets, (4) the costs of the debts (including banking interest) to average of these debts and, (5) the net interest margin were studied in this paper. For analysis of Regression Line Simple Coefficient in variants the SPSS software was used. The study shows that in Sana’t & Ma’dan Bank there is a direct and significant relation between profitability and the reduction of interest rate decrease in industry and mining sector. This means that the bank has failed to develop its investments so variously as to prevent decrease in bank profitability due to the reduction of interest rate, although other factors had been potentially effective in this issue