Investigation of the relationship of non-performing loans with macroeconomic variables in the Turkish banking sector

The importance of banks is increasing day by day in the Turkish economy as well as in all world economies. Seeing growth in the economy depends on the use of small and idle resources in new investments by growing like a snowball. Small amounts collected in bank vaults for the purpose of generating income by the savers are transferred to the market as loans. By transferring bank loans to productive investments, there are results such as the vitality of economic life, the evaluation of idle money, the introduction of new projects in industrialization, the revival of financial markets. Problems that may arise in loans will affect the savings owners, business owners, banks, all persons and institutions that are somehow connected with the business, and ultimately have negative reflections on the national economy. In this study, the reflections of problematic bank loans on macroeconomic variables were investigated. In this study, in which the relationship between non-performing loans and macroeconomic indicators is evaluated, NPL as the quarterly dependent variable, Gross Domestic Product, Total Private Consumption Expenditures, Real Rate of Increase, CPI Rate of Change data as the independent variable for the period of 2010:1Q-2019:4Q. used. In the study, the long-term relationships between the variables were examined, and for this purpose, cointegration analysis was performed with the ARDL Boundary Test. In addition, short-term relationships with the Error Correction Model (VECM) were also examined. Finally, the findings obtained as a result of the analysis were interpreted.