Determinants of Deposit Bank Profitability: Evidence from Turkey


Ozgur O., Gorus M. S.

JOURNAL OF APPLIED ECONOMICS AND BUSINESS RESEARCH, vol.6, no.3, pp.218-231, 2016 (Journal Indexed in ESCI) identifier

  • Publication Type: Article / Article
  • Volume: 6 Issue: 3
  • Publication Date: 2016
  • Title of Journal : JOURNAL OF APPLIED ECONOMICS AND BUSINESS RESEARCH
  • Page Numbers: pp.218-231

Abstract

This study aims to investigate the impact of bank-specific and macroeconomic factors on deposit bank profitability in Turkey. To present the significance of these variables OLS methodology is performed to construct multiple regression analysis. Monthly data is employed for the period over 2006:1 to 2016:2. Empirical results suggested that, equity over total assets, non-performing loans to total cash loans, net interest revenues to average total assets, and central bank policy interest rate have a significant impact over return on assets while non-interest income over total assets, market share of deposit banks in banking sector, operational expenses to average total assets, and exchange rate are not statistically significant. Also, effect of recent global financial crisis on bank performance is significantly negative. Indeed, result of this study provide supportive evidence that financial crisis adversely affected banking industry performance in Turkey.