Banking is an important part of each system. In national economy, banks are financial entities that play as financial interfaces, and functions such as saving, investment, production, occupation, and growth of national economy are affected by decisions and operations of banks. Regarding to the bank-centric economy of Iran, banks are the most important elements of monetary market and play important roles in economy of country.
This research studies the effect of ownership structure on performance of private banks in Iran. The statistical sample includes 13 banks listed in Tehran Stock Exchange during a 7-year period from 2009 to 2015. The dependent variables of this research are ROA and ROE. The independent variables are private ownership, state ownership, ownership concentration, corporate governance, and non-performing loan (NPL). Corporate governance, in this research, has been calculated by an index composed of 5 groups: board responsibility, board structure, equity, transparency, disclosure, and audit committee. Four hypotheses were tested by pooled regression models: effect of ownership structure, ownership concentration, credit risk, and corporate governance mechanisms on profitability of private banks. The findings show that ownership structure does not affect ROA and ROE of private banks. Ownership concentration and credit risk reversely affect ROA and ROE. Also, corporate governance mechanisms directly affect ROA and ROE of private banks.