Analysis of The Factors Affecting The Profitability of Banks In Turkey By Lasso Regression

Year 2022, Volume: 2 Issue: 1, 46 - 57, 30.06.2022

Gizem Nur Bayrakcı

Abstract

In the article examining the factors affecting the profitability indicators of the banking sector, which has a large share in the financial sector in Turkey, the analysis of the factors affecting the return on assets and return on equity ratios of the top 10 deposit banks in 2020, ranked according to their asset size in 2020, was made with the lasso regression method. As a result of the analysis, separate models were established for return on assets and return on equity. Among the independent variables, only the deposit variable was excluded from the model and it was seen that the effect on profitability was not as much as the variables of securities portfolio, equity, NPL ratio, asset share, inflation and gross domestic product.

Keywords

Profitability in Banking, Return on Assets, Return on Equity, LASSO regression method

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