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Profitability in Turkish Banking Sector: Panel Data Analysis (The period 1990-1999)

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  • Güneş, Nizamülmülk

Abstract

In this study, the factors determining profitability in the Turkish banking sector are examined. Return on assets (ROA) is analyzed through panel data analysis using internal, external and sectorial factors. The purpose of the study is to explore the factors that affect bank profitability and to develop policy suggestions based on the findings. In the literature section of the study, domestic and foreign sources concerning bank profitability are scanned. In the section of econometric analysis, data belonging to the period 1990-1999 of state-owned, privately owned national and foreign deposit banks operating in Turkish banking sector are analyzed by using Stata program and panel data method. The analysis results indicate that capital and liquidity are the most important variables for ROA. In addition to that, it is reached that it is ensuring the efficiency in cost management for 1990-1990 period, keeping loans under follow at a low level and risk management make a positive impact on profitability.

Suggested Citation

  • Güneş, Nizamülmülk, 2014. "Profitability in Turkish Banking Sector: Panel Data Analysis (The period 1990-1999)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1(1), pages 15-26.
    • Handle: RePEc:zbw:espost:105839
    DOI: 10.1453/jest.v1i1.89
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    References listed on IDEAS

    as
    1. Demirguc, Asli & Huizinga, Harry, 1999. "Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence," The World Bank Economic Review, World Bank, vol. 13(2), pages 379-408, May.
    2. Athanasoglou, Panayiotis P. & Brissimis, Sophocles N. & Delis, Matthaios D., 2008. "Bank-specific, industry-specific and macroeconomic determinants of bank profitability," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 18(2), pages 121-136, April.
    3. Berger, Allen N, 1995. "The Relationship between Capital and Earnings in Banking," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(2), pages 432-456, May.
    4. Goddard, John & Molyneux, Phil & Wilson, John O S, 2004. "Dynamics of Growth and Profitability in Banking," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(6), pages 1069-1090, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Profitability; Bank Profitability; Return on Assets; Panel Data Analysis;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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