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Year 2017, , 404 - 416, 30.12.2017
https://doi.org/10.17261/Pressacademia.2017.750

Abstract

References

  • Abbasoğlu, O.F., Aysan, A.F. & Güneş, A. (2007). Concentration, competition, efficiency and profitability of the Turkish banking sector in the post-crisis period. Banks and Bank Systems, 2(3), 106-115.
  • Adusei, M. (2015). Bank profitability: Insights from the rural banking industry in Ghana. Cogent Economics & Finance, 3(1), 1078270.
  • Akbaş, H.E. (2012). Determinants of bank profitability: An investigation on Turkish banking sector. Öneri Dergisi, 10(37), 103-110.
  • Alp, A., Ban, Ü., Demirgüneş, K. & Kılıç, S. (2010). Türk bankacılık sektöründe karlılığın içsel belirleyicileri. İMKB Dergisi, 12(46), 1-13.
  • Alper, D. & Anbar, A. (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.
  • Barros, C.P., Ferreira, C. & Williams, J. (2007). Analysing the determinants of performance of best and worst European banks: A mixed logit approach. Journal of Banking & Finance, 31(7), 2189-2203.
  • Başçı, E. & Kara, H. (2011). Finansal istikrar ve para politikası. İktisat İşletme ve Finans, 26(302), 9-25.
  • Bikker, J.A. & Hu, H. (2002). Cyclical patterns in profits, provisioning and lending of banks and procyclicality of the new Basel capital requirements. BNL Quarterly Review, No.221, 143-175.
  • 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.
  • Bourke, P. (1989). Concentration and other determinants of bank profitability in Europe, North America and Australia. Journal of Banking and Finance, 13, 65-79.
  • Caporale, G.M., Lodh, S. & Nandy, M. (2017). The performance of banks in the MENA region during the global financial crisis. Research in International Business and Finance, 42, 583-590.
  • Chronopoulos, D.K., Liu, H., McMillan, F.J. & Wilson, J.O.S. (2015). The dynamics of US bank profitability. The European Journal of Finance, 21(5), 426-443.
  • Demirgüç-Kunt, A., & Huizinga, H. (1999). Determinants of commercial bank interest margins and profitability: Some international evidence. The World Bank Economic Review, 13(2), 379-408.
  • Demirgüç-Kunt, A., & Huizinga, H. (2000). Financial structure and bank profitability. The World Bank Policy Research Working Paper, No. 2430.
  • Dietrich, A. & Wanzenried, G. (2011). Determinants of bank profitability before and during the crisis: Evidence from Switzerland. Journal of International Financial Markets, Institutions, and Money, 21, 307-327.
  • Dietrich, A. & Wanzenried, G. (2014). The determinants of commercial banking profitability in low-, middle-, and high-income countries. The Quarterly Review of Economics and Finance, 54(3), 337-354.
  • Djalilov, K., & Piesse, J. (2016). Determinants of bank profitability in transition countries: What matters most?. Research in International Business and Finance, 38, 69-82.
  • Fase, M.M.G., & Abma, R.C.N. (2003). Financial environment and economic growth in selected Asian countries. Journal of Asian Economics, 14, 11-21.
  • Goddard, J., Molyneux, P. & Wilson, J.O.S. (2004a). Dynamics of growth and profitability in banking. Journal of Money, Credit and Banking, 36(6), 1069-1090.
  • Goddard, J., Molyneux, P. & Wilson, J.O.S. (2004b). The profitability of European banks: A cross-sectional and dynamic panel analysis. Manchester School, 72(3), 363–381.
  • 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.
  • Hoffmann, P. S. (2011). Determinants of the profitability of the US banking industry. International Journal of Business and Social Science, 2(22), 255-269.
  • Isik, O. (2017). Internal determinants of profitability of state, private and foreign owned commercial banks operating in Turkey. Journal of Economics, Finance and Accounting (JEFA), 4(3), 342-353.
  • Işık, Ö. & Belke, M. (2017). An empirical analysis of the determinants of net interest margins of Turkish listed banks: Panel data evidence from post-crisis era, Sosyoekonomi, 25(34), 227-245.
  • 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.
  • Işık, Ö., Yalman, İ.N. & Koşaroğlu, Ş.M. (2017). Türkiye’de mevduat bankalarının kârlılığını etkileyen faktörler. İşletme Araştırmaları Dergisi, 9(1), 362-380.
  • Jansen, D. & Haan, J. (2003). Increasing concentration in European banking: A macro-level analysis. De Nederlandsche Bank Research Departmant, Research Memorandum Wo No.743.
  • Kaymak, T. & Bektas, E. (2008). East meets west? Board characteristics in an emerging market: Evidence from Turkish banks. Corporate Governance, 16(6), 550-561.
  • King, R.G., & Levine, R. (1993). Finance and growth: Schumpeter might be right. The Quarterly Journal of Economics, 18(3), 717-737.
  • Levine, R. (1997). Financial development and economic growth: Views and agenda. Journal of Economic Literature, 35(2), 688-726.
  • 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.
  • Miller, S.M. & Noulas, A.G. (1997). Portfolio mix and large-bank profitability in the USA. Applied Economics, 29, 505-512.
  • Molyneux, P. & Thornton, J. (1992). Determinants of European bank profitability: A note. Journal of Banking and Finance, 16, 1173-1178.
  • Ozili, P.K. (2017). Bank profitability and capital regulation: Evidence from listed and non-listed banks in Africa. Journal of African Business, 18(2), 143-168.
  • Pasiouras, F. & Kosmidou, K. (2007). Factors influencing the profitability of domestic and foreign commercial banks in the European Union. Research im International Business and Finance, 21(2), 222-237.
  • Perry, P. (1992). Do banks gain or lose from inflation?. Journal of Retail Banking, 14(2), 25-40.
  • Petria, N., Capraru, B. & Ihnatov, I. (2015). Determinants of banks’ profitability: Evidence from EU 27 banking systems. Procedia Economics and Finance, 20, 518-524.
  • Rashid, A. & Jabeen, S. (2016). Analyzing performance determinants: Conventional versus Islamic banks in Pakistan. Borsa Istanbul Review, 16(2), 92-107.
  • Short, B.K. (1979). The relation between commercial bank profit rates and banking concentration in Canada, Western Europe and Japan. Journal of Banking and Finance, 3, 209-219.
  • Smirlock, M. (1985). Evidence on the (non) relationship between concentration and profitability in banking. Journal of Money, Credit and Banking, 17(1), 69-83.
  • Sufian, F. (2012). Determinants of bank profitability in developing economies: Empirical evidence from the South Asian banking sectors. Contemporary South Asia, 20(3), 375-399.
  • 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.
  • Taşkın, F.D. (2011). Türkiye’de ticari bankaların performansını etkileyen faktörler. Ege Akademik Bakış, 11(2), 289-298. Tatoğlu, F.Y. (2012). Panel veri ekonometrisi. Beta Yayıncılık, İstanbul.
  • Trujillo-Ponce, A. (2013). What determines the profitability of banks? Evidence from Spain”, Accounting & Finance, 53(2), 561–586.
  • Turgutlu, E. (2014). Dynamics of profitability in the Turkish banking industry. Ege Akademik Bakış, 14(1), 43-52.
  • Uludağ, B.K. & Gökmen, H. (2011). Türk bankacılık sektörünün kârlılığının dinamik yaklaşımla test edilmesi. s, V. (2015). Banking sector performance in Turkey before and after the global crisis. İktisat İşletme ve Finans, 26(308), 71-98.
  • Us, V. (2015). Banking sector performance in Turkey before and after the global crisis. İktisat İşletme ve Finans, 30(353), 45-74.
  • Williams, B. (2003). Domestic and international determinants of bank profits: foreign banks in Australia. Journal of Banking and Finance, 27(6), 1185-1210.

DETERMINANTS OF BANK PROFITABILITY: EVIDENCE FROM LISTED AND NON-LISTED BANKS IN TURKEY

Year 2017, , 404 - 416, 30.12.2017
https://doi.org/10.17261/Pressacademia.2017.750

Abstract

Purpose - The aim of
this study is to determine the bank-specific, sector-specific and macroeconomic
factors that affect the profitability of 23 deposit banks in Turkey.

Methodology-
in this study, we employ panel regression analyzes as well as mean and
median tests. Our study using quarterly data covering the period 2005Q1-2015Q4
is divided into two groups: listed banks and non-listed banks.

Findings- According to
the results of the mean and median tests, there are significant differences
between the listed banks and non-listed banks in terms of bank-specific
variables. Regression results also indicate that the bank profitability is
significantly affected by the variables such as bank size, bank capital,
liquidity risk, economic growth, inflation, policy rate, exchange rate, and
market concentration.

Conclusion- When our
results are evaluated in general, it could be said that the factors affecting
profitability significantly differ according to whether the banks are traded at
the Borsa Istanbul. 

References

  • Abbasoğlu, O.F., Aysan, A.F. & Güneş, A. (2007). Concentration, competition, efficiency and profitability of the Turkish banking sector in the post-crisis period. Banks and Bank Systems, 2(3), 106-115.
  • Adusei, M. (2015). Bank profitability: Insights from the rural banking industry in Ghana. Cogent Economics & Finance, 3(1), 1078270.
  • Akbaş, H.E. (2012). Determinants of bank profitability: An investigation on Turkish banking sector. Öneri Dergisi, 10(37), 103-110.
  • Alp, A., Ban, Ü., Demirgüneş, K. & Kılıç, S. (2010). Türk bankacılık sektöründe karlılığın içsel belirleyicileri. İMKB Dergisi, 12(46), 1-13.
  • Alper, D. & Anbar, A. (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.
  • Barros, C.P., Ferreira, C. & Williams, J. (2007). Analysing the determinants of performance of best and worst European banks: A mixed logit approach. Journal of Banking & Finance, 31(7), 2189-2203.
  • Başçı, E. & Kara, H. (2011). Finansal istikrar ve para politikası. İktisat İşletme ve Finans, 26(302), 9-25.
  • Bikker, J.A. & Hu, H. (2002). Cyclical patterns in profits, provisioning and lending of banks and procyclicality of the new Basel capital requirements. BNL Quarterly Review, No.221, 143-175.
  • 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.
  • Bourke, P. (1989). Concentration and other determinants of bank profitability in Europe, North America and Australia. Journal of Banking and Finance, 13, 65-79.
  • Caporale, G.M., Lodh, S. & Nandy, M. (2017). The performance of banks in the MENA region during the global financial crisis. Research in International Business and Finance, 42, 583-590.
  • Chronopoulos, D.K., Liu, H., McMillan, F.J. & Wilson, J.O.S. (2015). The dynamics of US bank profitability. The European Journal of Finance, 21(5), 426-443.
  • Demirgüç-Kunt, A., & Huizinga, H. (1999). Determinants of commercial bank interest margins and profitability: Some international evidence. The World Bank Economic Review, 13(2), 379-408.
  • Demirgüç-Kunt, A., & Huizinga, H. (2000). Financial structure and bank profitability. The World Bank Policy Research Working Paper, No. 2430.
  • Dietrich, A. & Wanzenried, G. (2011). Determinants of bank profitability before and during the crisis: Evidence from Switzerland. Journal of International Financial Markets, Institutions, and Money, 21, 307-327.
  • Dietrich, A. & Wanzenried, G. (2014). The determinants of commercial banking profitability in low-, middle-, and high-income countries. The Quarterly Review of Economics and Finance, 54(3), 337-354.
  • Djalilov, K., & Piesse, J. (2016). Determinants of bank profitability in transition countries: What matters most?. Research in International Business and Finance, 38, 69-82.
  • Fase, M.M.G., & Abma, R.C.N. (2003). Financial environment and economic growth in selected Asian countries. Journal of Asian Economics, 14, 11-21.
  • Goddard, J., Molyneux, P. & Wilson, J.O.S. (2004a). Dynamics of growth and profitability in banking. Journal of Money, Credit and Banking, 36(6), 1069-1090.
  • Goddard, J., Molyneux, P. & Wilson, J.O.S. (2004b). The profitability of European banks: A cross-sectional and dynamic panel analysis. Manchester School, 72(3), 363–381.
  • 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.
  • Hoffmann, P. S. (2011). Determinants of the profitability of the US banking industry. International Journal of Business and Social Science, 2(22), 255-269.
  • Isik, O. (2017). Internal determinants of profitability of state, private and foreign owned commercial banks operating in Turkey. Journal of Economics, Finance and Accounting (JEFA), 4(3), 342-353.
  • Işık, Ö. & Belke, M. (2017). An empirical analysis of the determinants of net interest margins of Turkish listed banks: Panel data evidence from post-crisis era, Sosyoekonomi, 25(34), 227-245.
  • 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.
  • Işık, Ö., Yalman, İ.N. & Koşaroğlu, Ş.M. (2017). Türkiye’de mevduat bankalarının kârlılığını etkileyen faktörler. İşletme Araştırmaları Dergisi, 9(1), 362-380.
  • Jansen, D. & Haan, J. (2003). Increasing concentration in European banking: A macro-level analysis. De Nederlandsche Bank Research Departmant, Research Memorandum Wo No.743.
  • Kaymak, T. & Bektas, E. (2008). East meets west? Board characteristics in an emerging market: Evidence from Turkish banks. Corporate Governance, 16(6), 550-561.
  • King, R.G., & Levine, R. (1993). Finance and growth: Schumpeter might be right. The Quarterly Journal of Economics, 18(3), 717-737.
  • Levine, R. (1997). Financial development and economic growth: Views and agenda. Journal of Economic Literature, 35(2), 688-726.
  • 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.
  • Miller, S.M. & Noulas, A.G. (1997). Portfolio mix and large-bank profitability in the USA. Applied Economics, 29, 505-512.
  • Molyneux, P. & Thornton, J. (1992). Determinants of European bank profitability: A note. Journal of Banking and Finance, 16, 1173-1178.
  • Ozili, P.K. (2017). Bank profitability and capital regulation: Evidence from listed and non-listed banks in Africa. Journal of African Business, 18(2), 143-168.
  • Pasiouras, F. & Kosmidou, K. (2007). Factors influencing the profitability of domestic and foreign commercial banks in the European Union. Research im International Business and Finance, 21(2), 222-237.
  • Perry, P. (1992). Do banks gain or lose from inflation?. Journal of Retail Banking, 14(2), 25-40.
  • Petria, N., Capraru, B. & Ihnatov, I. (2015). Determinants of banks’ profitability: Evidence from EU 27 banking systems. Procedia Economics and Finance, 20, 518-524.
  • Rashid, A. & Jabeen, S. (2016). Analyzing performance determinants: Conventional versus Islamic banks in Pakistan. Borsa Istanbul Review, 16(2), 92-107.
  • Short, B.K. (1979). The relation between commercial bank profit rates and banking concentration in Canada, Western Europe and Japan. Journal of Banking and Finance, 3, 209-219.
  • Smirlock, M. (1985). Evidence on the (non) relationship between concentration and profitability in banking. Journal of Money, Credit and Banking, 17(1), 69-83.
  • Sufian, F. (2012). Determinants of bank profitability in developing economies: Empirical evidence from the South Asian banking sectors. Contemporary South Asia, 20(3), 375-399.
  • 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.
  • Taşkın, F.D. (2011). Türkiye’de ticari bankaların performansını etkileyen faktörler. Ege Akademik Bakış, 11(2), 289-298. Tatoğlu, F.Y. (2012). Panel veri ekonometrisi. Beta Yayıncılık, İstanbul.
  • Trujillo-Ponce, A. (2013). What determines the profitability of banks? Evidence from Spain”, Accounting & Finance, 53(2), 561–586.
  • Turgutlu, E. (2014). Dynamics of profitability in the Turkish banking industry. Ege Akademik Bakış, 14(1), 43-52.
  • Uludağ, B.K. & Gökmen, H. (2011). Türk bankacılık sektörünün kârlılığının dinamik yaklaşımla test edilmesi. s, V. (2015). Banking sector performance in Turkey before and after the global crisis. İktisat İşletme ve Finans, 26(308), 71-98.
  • Us, V. (2015). Banking sector performance in Turkey before and after the global crisis. İktisat İşletme ve Finans, 30(353), 45-74.
  • Williams, B. (2003). Domestic and international determinants of bank profits: foreign banks in Australia. Journal of Banking and Finance, 27(6), 1185-1210.
There are 52 citations in total.

Details

Journal Section Articles
Authors

Murat Belke

Esra Aydin Unal

Publication Date December 30, 2017
Published in Issue Year 2017

Cite

APA Belke, M., & Unal, E. A. (2017). DETERMINANTS OF BANK PROFITABILITY: EVIDENCE FROM LISTED AND NON-LISTED BANKS IN TURKEY. Journal of Economics Finance and Accounting, 4(4), 404-416. https://doi.org/10.17261/Pressacademia.2017.750

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