The effects of the income diversification over profits of the Turkish deposit banks

The banking sector which has been constantly developing from past to present, still doesn't have an established system in most of the countries. When its importance in the economy and financial system taken into consideration, banks which should have had more powerful financial structures, develop policies in terms of providing different sources of income, enhancing their profits and reducing the risks. With this way, stepping outside of the classical banking, they aim to provide multiple products and services to gain different types of incomes besides the interest income. In this study, it is aimed to analyze the effects of the income diversification over the return on assest and return on equity. In this direction, Herfindahl Hirschman Index (HHI) has been used as income diversification index to determine its impacts over return of assets (ROA) and return of equity (ROE). As analysing method, multiple linear regression has been used and benefited from the datas of the 20 deposit bank functioning between 2016-2017. Keywords: Income diversification, ROA, ROE, Regression