Analysis of determinating factor of profitability in the banking sector

The subject of profitability of the banking sector is an important factor in the survival of the sector. The profitability factor that differs according to each bank type is evaluated comperatively for bank types in this study. Banks included in this analysis; chosen from commercial banks and participation banks. 2010-2017 period for commercial banks and for participation banks, the period between 2010-2018 is discussed. Since the data of tne commercial banks for 2018 are not available, this year's datas could not be analyzed. Also; since the Participation banks are very new in the sector, the data for this year are included in the analysis. Private Banks in the Commercial Banks class; Akbank, Anadolubank, Sekerbank, Turkish Bank, Turkish Economy Bank, Isbank of Turkey and Yapi and Credit Bank has been analyzed. Foreign Capital Banks; Arab Turkish Bank, Deniz Bank, Finans Bank, HSBC, Citibank, Deuscthe Bank; and also among Public Owned Banks; Vakıfbank, Hakbank and Ziraat Bank has been analyzed. Participation Banks included in this analysis also; Albaraka Turk Participation Bank, Turkey Finance Participation Bank, Vakıf Participation and Ziraat Participation Banks. The aim of this study; to determine the factors affecting the profitability performance of bank types in the given period. Data about the banks to be analyzed; Banks Association of Turkey (TBB) and Turkey Participation Banks Association (TKBB) has been taken. In this study; one of the non-parametric regression methods MARS ® (Multivariate Adaptive Regression Splines) was used for bank profitability measurement. This method; is used to determine the relationship between a dependent variable and independent variables. The dependent variables in this study were Return on Assets (ROA) and Return on Equity (ROE). As independent variables; Assets per Branch, Deposits per Branch, Credits per Branch, Net Profit per Branch, Assets per Personnel, Deposits per Personnel, Credits per Personnel and Net Profit per Personnel. As a result of the analysis, it was determined that the ROA dependent variable has different results in terms of both bank groups. Especially when the number of significant variables in the model is analyzed, more variables of commercial banks compared to participation banks were found to be significant. Only two significant variables were found in participation banks. As a result of the analysis of commercial banks according to ROA dependent variable; Net Profit per Personnel, Net Profit per Branch, Credits per Branch and Deposits per Personnel were found statistically significant. Significant variables of commercial banks according to ROE; Net Profit per Personnel, Net Profit per Branch, Assets per Branch and Credits per Personnel were found. In terms of ROA value of Participation Banks; the variables Deposits per Personnel and Net Profit per Personnel were highly significant. It is also analyzed for the ROE dependent variable of Participation Banks; Credits per Personnel and Assets per Branch were found to be statistically significant in the model description. Keywords: Commercial Banks, Participation Banks, MARS ® Method, Profitability Analysis