DETERMİNANTS OF PERFORMANCE İN THE TURKİSH BANKİNG SECTOR

Abstract

The aim of the study is to identify the determinants of performance in the Turkish Banking Sector. For this purpose, panel datasets consisting of data from banks that were continuously operating and accepting deposits between quarters 2006-4 and 2020-2, were analyzed with Driscoll-Kraay and Fark GMM estimators. According to the results of the study, the asset profitability of banks was significantly and negatively affected by the bank scale and efficiency ratio variables. However, it was determined that asset profitability was significantly and positively affected by the equity ratio, liquidity ratio and net interest margin variables. Return on equity, another profitability indicator, is affected significantly and negatively by non-performing loans, efficiency ratio, loan/deposit ratio variables; but it was significantly and positively affected by the net interest margin variable. It is important that the capital values are at certain levels, since it represents the equity ratios in terms of the profitability performance of the banks. In addition, it is essential to ensure efficiency by increasing the share of net interest margins and liquid assets in total assets; and decrease the ratio of non-performing loans in total loans.