International Research Journal of Applied and Basic Sciences © 2013 Available online at www.irjabs.com ISSN 2251-838X / Vol, 5 (12): 1491-1500 Science Explorer Publications Internal factors affecting the profitability of City Banks Fatemeh Nahang 1 , Maryam Khalili Araghi 2 1. M.Sc of Accounting of Department of Accounting, Faculty of Accounting, Science and Research Branch , Islamic Azad University , Zahedan, Iran 2. Assistant Professor of Department of Business Management, Science and Research Branch, Islamic Azad University, Tehran, Iran *Corresponding Author email:fateme.nahang@yahoo.com ABSTRACT: Banks as intermediaries' money resources besides the institutions like investment stock market and insurance markets are considered as the main pillars of financial. Study for identification of the performance of banks in the implementation of each of the functions can present a spectrum of strengths points and the existing weakness in the banks. As far as the banks just like the other companies follow economic profitability, to achieve this important goal is necessary to recognition of effective variables on the profitability. The present research examined the internal factors affecting the profitability of city banks during the years 2012-2009.Internal factors affecting the profitability of banks, including; deposit amount, the payment facilities, credit risk management, cost management and the amount of liquidity. The research method was a descriptive –correlational and testing of hypotheses by examining the correlation and regression. The results showed that there is a direct relationship between the profitability of the banks with the credit risk management and cost management, and the amount of deposits, loan payments, and the amount of liquidity are negatively and significantly related. Keywords: cash; city banks; deposits; internal factors; loan payments; profitability INTRODUCTION Banks as intermediaries of money resources besides other institutions like investment stock market and insurance are considered as the main pillars of financial markets. They are one of the major causes for the economic policies and also executors for monetary decision of Central Bank. Banks by contraction and expansion of credits and redirect funds from part to part, aside from helping to stabilize the economy at the large level, have an important role in the regulation of the economy. Due to the lack of necessary development of capital market in economy of Iran, banking is more important and in practice these are the banks which are responsible for long-term financing (Shadkam, 2001). Today banks offer a variety of services to its clients, including deposits, granting loans and new services that are offered through the World Wide Web. Increasing efficiency and providing a variety of services in the minimum of time are some of the expectation which banking network always had faced in this regard the initiate action such as SHETAB plan (Interbank Information Network) and electronic banking in the country's banking system has been designed and implemented. Banking system through directing resources to manufacturing and service sectors, to fulfill their social responsibility can create production; employment and economic growth in the country .The field of activity in banking are divided into three parts resource mobilization, allocation of resources and services. Thus identification of banks performance in the implementation of each of its tasks can present a range of strengths and weaknesses in banks. Since banks just like the other firms seek economic profitability to achieve this important goal, it is necessary to identify effective variables. Determinant factors of bank profitability are separated to both internal factors which is controlled by bank management and external factors outside the control of management and under the condition of massive environment. Role of financial markets (banks) in Iran in providing financial of various economic sectors is stronger and bolder than the capital markets. The basic goal of any business and economic bank is profitability. Banks use all of their efforts to achieve the objectives and meet the economic needs of the community they serve and they are considered as one of the main tools of monetary policy in each country's economic system for on one hand gather small savings and wandering funds in the hands of the people and on the other hand in line with the implementation of economic policies and credit which has been set, direct the financial resources