The Structure of the Turkish banking sector after the 1994-2000 and 2001 financial crises

This thesis analyses the structure of the Turkish banking sector which has been characterized in disinflation process after financial crises period. In this new environment, the structure of banks' balance sheets will change. While inflation based net incomes from loans will decrease, share of other income will increase, and profit margin may fall. This new competitive environment led banks to enhance their instruments and diversify their activities as a result of favorable developments in EU integration process and flourishing foreign demand to the sector In this study, profitability of the sector during 2001-2004 period is examined by using "Panel Data Analysis". The descriptive analysis showed that, as a result of decrease in profit margins of return from public sector borrowing requirements, securities portfolio have been decreased and the turn over ratio of deposits to loans has increased. Private and foreign banking activities become more favorable and profitable as a result of competition and diversified banking activities. Consolidation within sector will be taking place as small size banks will not be able to survive Keywords: Banking sector, stabilization program, crises and profitability.