Estimating the profitability of privately owned banks: A comprative study

Banks are institutions that exchange money with interest, conduct loans, discounts, and foreign exchange transactions, store cash, valuable documents, and belongings in their safes, and engage in other commercial, economic, and other related activities. The profitability of the banking sector is crucial from an economic perspective. Estimating banking profitability using the best method is crucial. ANN (MLP), LSTM, ARIMAX, and linear regression analyses were used to estimate the net commercial profitability of these successful, selected privately owned banks in Turkey. Data from five different banks: Akbank, Şekerbank, TEB, Anadolubank, and Türkiye İş Bankası, covering the period 2006Q1-2025Q1, were used in the study. Model outputs were evaluated and interpreted using graphical analyses and error displays (MAPE, MAE, RMSE, and MSE). The study was concluded by comparing the ANN (MLP), LSTM, ARIMAX, and linear regression models' prediction results for bank net commercial profitability.