Is Liquidity An Influencing Factor for Profitability of Banks? An Empirical Study

Abstract

This study attempts to assess whether liquidity has any influence on the profitability of Turkish banks or not. We conduct the study using panel data collected from the website of the Association of Banks of Turkey. We select 10 biggest banks of Turkey based on asset size as on 31.12.2017 and used 10 years’ data ranging from 2008-2017. Loan Deposit, Deposit Asset, Liquid Asset to TA, Liquid Asset to Short- term Liability and Liquid Assets to Deposits and Non-Deposit Resources Ratio has been considered as a proxy of liquidity and average ROA and average ROE has been considered as a proxy of profitability. We analyze the data based on correlations analysis. We also run the Random effect regression model in our study with the support of E-Views 10. Our study reveals that Loan Deposit Ratio and Liquid Asset to Total Asset ratio do have a significant negative influence on both ROE and ROA. Deposit Asset Ratio does have a significant and negative influence on ROA but an insignificant and negative influence on ROE. Moreover, Liquid Asset to Deposit and Non-Deposit Resources Ratio shows a statistically significant but negative influence on ROE; in contrast an insignificant but positive impact on ROA.

Keywords

• Liquidity,Profitability

Likidite Bankaların Kârlılığını Etkileyen Faktör mü? Ampirik Bir Çalışma

Öz

Bu çalışma, likiditenin Türk bankalarının karlılığı üzerinde herhangi bir etkisi olup olmadığını değerlendirmeye çalışmaktadır. Çalışmayı Türkiye Bankalar Birliği web sitesinden toplanan panel verilerini kullanarak yürütüyoruz. 31.12.2017 tarihi itibariyle aktif büyüklüğüne göre Türkiye'nin en büyük 10 bankasını seçtik ve 2008-2017 yılları arasındaki 10 yıllık verileri kullandık. Kredi Mevduatı, Mevduat Varlığı, Toplam Varlığa (TA) Likit Aktif, Kısa Vadeli Borçlara Likit Aktif ve Likit Aktiflere Mevduat ile Mevduat Olmayan Kaynaklar Oranını likidite ve ortalama ROA ile ortalama ROE karlılığın vekili olarak kabul edilmiştir. Verileri korelasyon analizine dayanarak analiz ediyoruz. Ayrıca EViews 10 desteğiyle Rasgele Etki regresyon modelini de uyguladık. Çalışmamız, Kredi Mevduat Oranı ve Likit Aktif - Toplam Varlık oranının ROE ve ROA üzerinde önemli olumsuz etkileri olduğunu ortaya koymaktadır. Mevduat Varlık Oranı, ROA üzerinde önemli ve olumsuz bir etkiye sahip olmakla birlikte, ROE üzerinde önemsiz ve olumsuz bir etkiye sahiptir. Ayrıca, Likit Aktiflerin Mevduat ve Mevduat Olmayan Kaynaklara Oranı, ROE üzerinde istatistiksel olarak anlamlı fakat olumsuz etki göstermektedir; aksine ROA üzerinde önemsiz fakat olumlu bir etki göstermektedir.

Anahtar Kelimeler

• Liquidity,Profitability,Banking Sector,Likidite,Karlılık

Kaynakça

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