Determinants of profitability in the Turkish banking sector: An application on deposit banks

In this study, it is tried to examine factors that affect the profitability of deposit banks, based on the example of 9 (nine) banks that are currently operating in the Turkish banking sector, being traded in the BIST (Borsa Istanbul) for the period of 2006 and 2019, offered to the public and whose data are continuous. In this context, ROE (Return on Equity) and ROA (Return on Assets) of the banks were examined with panel data analysis method, with the help of various micro-economic variables specific to the banking sector by using the data of 3 (three) months, that is, quarterly. According to the results obtained from the study, it was determined that there is a significant and positive relationship between ROE (Return on Equity) and EQGR (Equity Growth) and CRGR (Credit Growth) rates. However, from the point of view of ROA (Return on Assets), it was concluded that there is a positive relationship with EQGR (Equity Growth) ratio, but there is a negative relationship with NII/TA (Non-Interest Income/Total Assets) and CRGR (Credit Growth) variables. In addition, in the findings obtained, EQGR (Equity Growth) ratio for ROE (Return on Equity) and NII/TA (Non-Interest Income/Total Assets) ratio for ROA (Return on Assets) were found to be the most explanatory variables.