Background: Credit risk is one of the most important issues of the banking system that can cause financial and economic crises at micro and macro level. Accordingly, a number of studies have shown that ethical variables can minimize banks' credit risk. However, many empirical studies are not available. Accordingly, the purpose of this study is to examine the components of business ethics based on the credit status of banks' legal customers.
Method: This study is one of the post hoc studies. The statistical population of this study includes all legal customers of Pasargad Bank Northwest who received credit facilities from Bank before 2019. The sample size of 157 legal clients is divided into two groups of current and past clients. Purposive sampling was used. Questionnaire was used for data collection. Its validity and reliability were confirmed by confirmatory factor analysis and Cronbach's alpha coefficient. Multivariate analysis of variance was used to analyze the data.
Results: Findings show that there is a significant difference between the ethical components of business between current and past customers and the average score of current customers is higher than past customers.
Conclusion: The results show that ethical components can determine the credit status of legal clients and it is necessary to use ethical components in credit risk assessment models. Considering these components in lending can reduce credit risk.