Abstract

in developing countries, the role of financial markets, such as banks, in financing various economic sectors is stronger and more prominent than capital markets such as stock exchange. So it can be extraordinary important to evaluate the banks performance, according to their prominent role in economy. Profitability is one of the influencing factors in the evaluation of banks performance. Factors influencing on the profitability of banks can be divided into two categories: internal factors, which are under the control of bank management, and external factors, which are beyond the control of bank management. This paper aims to study and investigate the relationship mode between credit risk management and liquidity management and the profitability in banking system. According to the obtained results, variables such as liquidity management and credit risk management have a significant relationship with profitability in banking system, compared with the other internal factors. Finally, according to the results, a series of practical solutions have been proposed to increase the profitability of banks.