Relationship between loan interest, loan volume, and net profit in Turkish banking sector

In the past two decades, the investment of foreign capitals in the finance sector of developing markets has increased extremely. The direct foreign-capital investments have now importance for every country. With the development of globalization, the foreign-capital investments have started to take more places in the finance sector. Being among the developing countries, Turkey has been among preferred countries for the foreign direct investments. Regulations that took place following crisis in the banking sector in 2000 and 2001 and the growth trend in the world economies have made the banking sector attractive. It cannot be denied that the foreign investments made positive contributions to the current deficit, employment, gross domestic product, increasing quality standards with competition rules. Also, the indirect effect of foreign capitals include a bigger increase to the banking system's deposit and loan volume because of the production increase and an increase in volume trade and profit. The secondary effects of the foreign-capital investments to the sector are that it has multiplier effects on service standards, product variety, and profit margin with the developing market conditions. This study tells the tests and analysis related to the effect of net profit of loan interest and volume of Turkish banking sector on the net profit of public and private banks.