Profitability and Transparency in the North Cyprus Banking Industry

ABSTRACT: This study aims to determine the difference between the strengths and weaknesses of the commercial banks in North Cyprus that affects their profiting abilities by using bank-specific variables. The banks were examined by their ownership structures of Public, Private and Foreign. The data used is from a sample of 17 banks operating between the years 2001 and 2009. Three separate regression models were run to see the significant variables on bank profitability on all banks, private banks and foreign banks. Foreign banks showed a higher profitability on average along with a better asset management. Private Banks showed a better efficiency in operating expenses. All three groups of banks showed a significant level of liquidity that contributed to their profitability. In addition to this a regression was run to test if transparency has an impact on bank size with the data collected from 2010. It was concluded that with the additional information provided to the public, funds were added to the asset size. Transparency and bank size was found to have a positive relation. Keywords: Ownership Structure, Profitability, North Cyprus, Transparency. ……………………………………………………………………………………………………………………………………………………………………………………………………………………