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Year 2017, , 342 - 353, 30.09.2017
https://doi.org/10.17261/Pressacademia.2017.701

Abstract

References

  • Adusei, M. (2015). Bank profitability: Insights from the rural banking industry in Ghana. Cogent Economics & Finance, 3(1), 1-15.
  • Ahamed, M. M. (2017). Asset quality, non-interest income, and bank profitability: Evidence from Indian banks. Economic Modelling, 63, 1-14.
  • Alp, A., Ban, Ü., Demirgüneş, K., & Kılıç, S. (2010). Türk bankacılık sektöründe karlılığın içsel belirleyicileri. İMKB Dergisi, 12(46), 1-13.
  • Anbar, A., & Alper, D. (2011). Bank specific and macroeconomic determinants of commercial bank profitability: Empirical evidence from Turkey, Business and Economics Research Journal, 2(2), 139-152.
  • Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2008). Bank-specific, industry-specific and macroeconomic determinants of bank profitability. Journal of international financial Markets, Institutions and Money, 18(2), 121-136.
  • Aydemir, R., & Guloglu, B. (2017). How do banks determine their spreads under credit and liquidity risks during business cycles?. Journal of International Financial Markets, Institutions and Money, 46, 147-157.
  • Azam, M., & Siddiqui, S. (2012). Domestic and Foreign Banks' Profitability: Differences and Their Determinants. International Journal of Economics and Financial Issues, 2(1), 33-40.
  • Beltratti, A., & Stulz, R. M. (2009). Why did some banks perform better during the credit crisis? A cross-country study of the impact of governance and regulation, NBER Working Paper, No. 15180.
  • Boadi, E. K., Li, Y., & Lartey, V. C. (2016). Role of Bank Specific, Macroeconomic and Risk Determinants of Banks Profitability: Empirical Evidence from Ghana's Rural Banking Industry. International Journal of Economics and Financial Issues, 6(2), 813-823.
  • Brighi, P., & Venturelli, V. (2014). How do income diversification, firm size and capital ratio affect performance? Evidence for bank holding companies. Applied Financial Economics, 24(21), 1375-1392.
  • Chronopoulos, D. K., Liu, H., McMillan, F. J., & Wilson, J. O. (2015). The dynamics of US bank profitability. The European Journal of Finance, 21(5), 426-443.
  • Çerçi, G., Kandır, S. Y., & Önal, Y. B. (2012). Bankalarda karlılık analizi: Türk bankacılık sektörü üzerine bir uygulama. İMKB Dergisi, 13(50), 29-48.
  • Davydenko, A. (2011). Determinants of bank profitability in Ukraine. Undergraduate Economic Review, 7(1), 1-30.
  • Flamini, V., Schumacher, M. L., & McDonald, M. C. A. (2009). The determinants of commercial bank profitability in Sub-Saharan Africa, IMF Working Paper 09/15. International Monetary Fund, Washington.
  • Garcia, M. T. M., & Guerreiro, J. P. S. M. (2016). Internal and external determinants of banks’ profitability: The Portuguese case. Journal of Economic Studies, 43(1), 90-107.
  • Greene, W. H. (2000). Econometric Analysis, Prentice Hall, New Jersey.
  • Gülhan, Ü., & Uzunlar, E. (2011). Bankacılık sektöründe kârlılığı etkileyen faktörler: Türk bankacılık sektörüne yönelik bir uygulama. Atatürk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 15(1), 341-368.
  • Güngör, B. (2007). Türkiye’de Faaliyet Gösteren Yerel ve Yabancı Bankaların Kârlılık Seviyelerini Etkileyen Faktörler: Panel Veri Analizi. İktisat İsletme ve Finans, 22(258), 40-63.
  • Heffernan, S. A., & Fu, X. (2010). Determinants of financial performance in Chinese banking. Applied Financial Economics, 20(20), 1585-1600.
  • Işık, Ö., Yalman, İ. N. & Koşaroğlu Ş. M. (2017). Türkiye’de mevduat bankalarının kârlılığını etkileyen faktörler. İşletme Araştırmaları Dergisi, 9(1), 362–380.
  • Isik, O., & Bolat, S. (2016). Determinants of non-Performing Loans of Deposit Banks in Turkey. Journal of Business, Economics and Finance, 5(4), 341-350.
  • Isik, O., & Ince, A. R. (2016). Board size, board composition and performance: an investigation on Turkish banks. International Business Research, 9(2), 74-84.
  • Isik, O., & Belke, M. (2017). An empirical analysis of bank-specific and macroeconomic drivers influencing net interest margins of Turkish listed banks: panel data evidence from post-crisis era, Yereli, A. B. & Koktas, A. M. (Ed.), in 3rd International Annual Meeting Proceedings Book (pp. 124-125). April 28-29, Ankara: Hacettepe University.
  • İskenderoğlu, Ö., Karadeniz, E., & Atioğlu, E. (2012). Türk bankacılık sektöründe büyüme, büyüklük ve sermaye yapısı kararlarının karlılığa etkisinin analizi. Eskişehir Osmangazi Üniversitesi İktisadi ve İdari Bilimler Dergisi, 7(1), 291-311.
  • Kasman, S., & Kasman, A. (2015). Bank competition, concentration and financial stability in the Turkish banking industry. Economic Systems, 39(3), 502-517.
  • Liu, H., Molyneux, P., & Wilson, J. O. (2013). Competition and stability in European banking: a regional analysis. The Manchester School, 81(2), 176-201.
  • Mamatzakis, E., & Remoundos, P. (2003). Determinants of Greek commercial banks, 1989-2000. Spoudai, 53(1), 84-94.
  • Menicucci, E., & Paolucci, G. (2016). The determinants of bank profitability: empirical evidence from European banking sector. Journal of Financial Reporting and Accounting, 14(1), 86-115.
  • Naceur, S. B., & Goaied, M. (2001). The determinants of the Tunisian deposit banks' performance. Applied Financial Economics, 11(3), 317-319.
  • Ozili, P. K., & Uadiale, O. (2017). Ownership concentration and bank profitability. Future Business Journal, 3(2), 159-171.
  • Pasiouras, F., & Kosmidou, K. (2007). Factors influencing the profitability of domestic and foreign commercial banks in the European Union. Research in International Business and Finance, 21(2), 222-237.
  • Pervan, M., Pelivan, I., & Arnerić, J. (2015). Profit persistence and determinants of bank profitability in Croatia. Economic research-Ekonomska istraživanja, 28(1), 284-298.
  • Reis, Ş. G., Kılıç, Y., & Buğan, M. F. (2016). Banka Karlılığını Etkileyen Faktörler: Türkiye Örneği. Muhasebe ve Finansman Dergisi, (72), 21-36.
  • Saif-Alyousf, A. Y., Saha, A., & Md-Rus, R. (2017). Profitability of Saudi Commercial Banks: A Comparative Evaluation between Domestic and Foreign Banks using Capital Adequacy, Asset Quality, Management Quality, Earning Ability and Liquidity Parameters. International Journal of Economics and Financial Issues, 7(2), 477-484.
  • Saona, P. (2016). Intra-and extra-bank determinants of Latin American Banks' profitability. International Review of Economics & Finance, 45, 197-214.
  • Shehzad, C. T., De Haan, J., & Scholtens, B. (2013). The relationship between size, growth and profitability of commercial banks. Applied Economics, 45(13), 1751-1765.
  • Sufian, F., & Chong, R. R. (2008). Determinants of bank profitability in a developing economy: empirical evidence from the Philippines. Asian Academy of Management Journal of Accounting & Finance, 4(2), 91-112.
  • Sufian, F., & Habibullah, M. S. (2009). Bank specific and macroeconomic determinants of bank profitability: Empirical evidence from the China banking sector. Frontiers of Economics in China, 4(2), 274-291.
  • Tan, Y. (2016). The Impacts of Risk and Competition on Bank Profitability in China. Journal of International Financial Markets, Institutions and Money, 40, 85-110.
  • Titko, J., Skvarciany, V., & Jurevičienė, D. (2015). Drivers of bank profitability: Case of Latvia and Lithuania. Intellectual Economics, 9(2), 120-129.
  • Uludağ, Berna K. ve Gökmen, H. (2011). Türk bankacılık sektörünün kârlılığının dinamik yaklaşımla test edilmesi. İktisat İşletme ve Finans, 26(308), 71-98.
  • Us, V. (2015). Banking Sector Performance in Turkey before and after the Global Crisis. Iktisat Isletme ve Finans, 30(353), 45-74.

INTERNAL DETERMINANTS OF PROFITABILITY OF STATE, PRIVATE AND FOREIGN OWNED COMMERCIAL BANKS OPERATING IN TURKEY

Year 2017, , 342 - 353, 30.09.2017
https://doi.org/10.17261/Pressacademia.2017.701

Abstract

Purpose - The purpose of this study is to identify the internal
determinants affecting profitability of 26 commercial banks (i.e. state,
private, and foreign banks) in Turkey.

Methodology- Fixed and
random effects panel data estimation techniques are employed to evaluate the
impact of various internal determinants on bank profitability in Turkish banks
having different ownership structures. The estimates are based on quarterly
data over the period 2009Q1-2016Q3.

Findings- Estimation results generally
indicate that bank profitability (i.e. return on assets) is positively affected
by variables such as income diversification, deposit level, bank scale, and bank
stability, but negatively influenced by variables representing credit risk,
lending level, operating expenses, and capital adequacy.







Conclusion- Bank
profitability is affected by all bank-specific variables. However, when the sample
is divided into three groups according to the ownership structure, the findings
show that the effects of the bank-specific variables differ according to the
bank ownership structure.

References

  • Adusei, M. (2015). Bank profitability: Insights from the rural banking industry in Ghana. Cogent Economics & Finance, 3(1), 1-15.
  • Ahamed, M. M. (2017). Asset quality, non-interest income, and bank profitability: Evidence from Indian banks. Economic Modelling, 63, 1-14.
  • Alp, A., Ban, Ü., Demirgüneş, K., & Kılıç, S. (2010). Türk bankacılık sektöründe karlılığın içsel belirleyicileri. İMKB Dergisi, 12(46), 1-13.
  • Anbar, A., & Alper, D. (2011). Bank specific and macroeconomic determinants of commercial bank profitability: Empirical evidence from Turkey, Business and Economics Research Journal, 2(2), 139-152.
  • Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2008). Bank-specific, industry-specific and macroeconomic determinants of bank profitability. Journal of international financial Markets, Institutions and Money, 18(2), 121-136.
  • Aydemir, R., & Guloglu, B. (2017). How do banks determine their spreads under credit and liquidity risks during business cycles?. Journal of International Financial Markets, Institutions and Money, 46, 147-157.
  • Azam, M., & Siddiqui, S. (2012). Domestic and Foreign Banks' Profitability: Differences and Their Determinants. International Journal of Economics and Financial Issues, 2(1), 33-40.
  • Beltratti, A., & Stulz, R. M. (2009). Why did some banks perform better during the credit crisis? A cross-country study of the impact of governance and regulation, NBER Working Paper, No. 15180.
  • Boadi, E. K., Li, Y., & Lartey, V. C. (2016). Role of Bank Specific, Macroeconomic and Risk Determinants of Banks Profitability: Empirical Evidence from Ghana's Rural Banking Industry. International Journal of Economics and Financial Issues, 6(2), 813-823.
  • Brighi, P., & Venturelli, V. (2014). How do income diversification, firm size and capital ratio affect performance? Evidence for bank holding companies. Applied Financial Economics, 24(21), 1375-1392.
  • Chronopoulos, D. K., Liu, H., McMillan, F. J., & Wilson, J. O. (2015). The dynamics of US bank profitability. The European Journal of Finance, 21(5), 426-443.
  • Çerçi, G., Kandır, S. Y., & Önal, Y. B. (2012). Bankalarda karlılık analizi: Türk bankacılık sektörü üzerine bir uygulama. İMKB Dergisi, 13(50), 29-48.
  • Davydenko, A. (2011). Determinants of bank profitability in Ukraine. Undergraduate Economic Review, 7(1), 1-30.
  • Flamini, V., Schumacher, M. L., & McDonald, M. C. A. (2009). The determinants of commercial bank profitability in Sub-Saharan Africa, IMF Working Paper 09/15. International Monetary Fund, Washington.
  • Garcia, M. T. M., & Guerreiro, J. P. S. M. (2016). Internal and external determinants of banks’ profitability: The Portuguese case. Journal of Economic Studies, 43(1), 90-107.
  • Greene, W. H. (2000). Econometric Analysis, Prentice Hall, New Jersey.
  • Gülhan, Ü., & Uzunlar, E. (2011). Bankacılık sektöründe kârlılığı etkileyen faktörler: Türk bankacılık sektörüne yönelik bir uygulama. Atatürk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 15(1), 341-368.
  • Güngör, B. (2007). Türkiye’de Faaliyet Gösteren Yerel ve Yabancı Bankaların Kârlılık Seviyelerini Etkileyen Faktörler: Panel Veri Analizi. İktisat İsletme ve Finans, 22(258), 40-63.
  • Heffernan, S. A., & Fu, X. (2010). Determinants of financial performance in Chinese banking. Applied Financial Economics, 20(20), 1585-1600.
  • Işık, Ö., Yalman, İ. N. & Koşaroğlu Ş. M. (2017). Türkiye’de mevduat bankalarının kârlılığını etkileyen faktörler. İşletme Araştırmaları Dergisi, 9(1), 362–380.
  • Isik, O., & Bolat, S. (2016). Determinants of non-Performing Loans of Deposit Banks in Turkey. Journal of Business, Economics and Finance, 5(4), 341-350.
  • Isik, O., & Ince, A. R. (2016). Board size, board composition and performance: an investigation on Turkish banks. International Business Research, 9(2), 74-84.
  • Isik, O., & Belke, M. (2017). An empirical analysis of bank-specific and macroeconomic drivers influencing net interest margins of Turkish listed banks: panel data evidence from post-crisis era, Yereli, A. B. & Koktas, A. M. (Ed.), in 3rd International Annual Meeting Proceedings Book (pp. 124-125). April 28-29, Ankara: Hacettepe University.
  • İskenderoğlu, Ö., Karadeniz, E., & Atioğlu, E. (2012). Türk bankacılık sektöründe büyüme, büyüklük ve sermaye yapısı kararlarının karlılığa etkisinin analizi. Eskişehir Osmangazi Üniversitesi İktisadi ve İdari Bilimler Dergisi, 7(1), 291-311.
  • Kasman, S., & Kasman, A. (2015). Bank competition, concentration and financial stability in the Turkish banking industry. Economic Systems, 39(3), 502-517.
  • Liu, H., Molyneux, P., & Wilson, J. O. (2013). Competition and stability in European banking: a regional analysis. The Manchester School, 81(2), 176-201.
  • Mamatzakis, E., & Remoundos, P. (2003). Determinants of Greek commercial banks, 1989-2000. Spoudai, 53(1), 84-94.
  • Menicucci, E., & Paolucci, G. (2016). The determinants of bank profitability: empirical evidence from European banking sector. Journal of Financial Reporting and Accounting, 14(1), 86-115.
  • Naceur, S. B., & Goaied, M. (2001). The determinants of the Tunisian deposit banks' performance. Applied Financial Economics, 11(3), 317-319.
  • Ozili, P. K., & Uadiale, O. (2017). Ownership concentration and bank profitability. Future Business Journal, 3(2), 159-171.
  • Pasiouras, F., & Kosmidou, K. (2007). Factors influencing the profitability of domestic and foreign commercial banks in the European Union. Research in International Business and Finance, 21(2), 222-237.
  • Pervan, M., Pelivan, I., & Arnerić, J. (2015). Profit persistence and determinants of bank profitability in Croatia. Economic research-Ekonomska istraživanja, 28(1), 284-298.
  • Reis, Ş. G., Kılıç, Y., & Buğan, M. F. (2016). Banka Karlılığını Etkileyen Faktörler: Türkiye Örneği. Muhasebe ve Finansman Dergisi, (72), 21-36.
  • Saif-Alyousf, A. Y., Saha, A., & Md-Rus, R. (2017). Profitability of Saudi Commercial Banks: A Comparative Evaluation between Domestic and Foreign Banks using Capital Adequacy, Asset Quality, Management Quality, Earning Ability and Liquidity Parameters. International Journal of Economics and Financial Issues, 7(2), 477-484.
  • Saona, P. (2016). Intra-and extra-bank determinants of Latin American Banks' profitability. International Review of Economics & Finance, 45, 197-214.
  • Shehzad, C. T., De Haan, J., & Scholtens, B. (2013). The relationship between size, growth and profitability of commercial banks. Applied Economics, 45(13), 1751-1765.
  • Sufian, F., & Chong, R. R. (2008). Determinants of bank profitability in a developing economy: empirical evidence from the Philippines. Asian Academy of Management Journal of Accounting & Finance, 4(2), 91-112.
  • Sufian, F., & Habibullah, M. S. (2009). Bank specific and macroeconomic determinants of bank profitability: Empirical evidence from the China banking sector. Frontiers of Economics in China, 4(2), 274-291.
  • Tan, Y. (2016). The Impacts of Risk and Competition on Bank Profitability in China. Journal of International Financial Markets, Institutions and Money, 40, 85-110.
  • Titko, J., Skvarciany, V., & Jurevičienė, D. (2015). Drivers of bank profitability: Case of Latvia and Lithuania. Intellectual Economics, 9(2), 120-129.
  • Uludağ, Berna K. ve Gökmen, H. (2011). Türk bankacılık sektörünün kârlılığının dinamik yaklaşımla test edilmesi. İktisat İşletme ve Finans, 26(308), 71-98.
  • Us, V. (2015). Banking Sector Performance in Turkey before and after the Global Crisis. Iktisat Isletme ve Finans, 30(353), 45-74.
There are 42 citations in total.

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Journal Section Articles
Authors

Ozcan Isik

Publication Date September 30, 2017
Published in Issue Year 2017

Cite

APA Isik, O. (2017). INTERNAL DETERMINANTS OF PROFITABILITY OF STATE, PRIVATE AND FOREIGN OWNED COMMERCIAL BANKS OPERATING IN TURKEY. Journal of Economics Finance and Accounting, 4(3), 342-353. https://doi.org/10.17261/Pressacademia.2017.701

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