Determinants of financial performance of the banking sector in Turkey

Soundness of economy goes parallel with financial performances of banks. It should be determined how to measure financial performance and understand the components of these criterions to enhance financial performances of banks. The aim of this thesis is revealing the bank specific, macroeconomic and sectoral factors of financial performances of banks operating in Turkey for commercial and participation banks seperately. Variables popularly used throughout national and international literature have been taken into account as well as contingent (e.g. global crisis) or unique (e.g. KGF guarantee and election economy) factors and a comparison has been made between commercial and participation banks. These factors have been evaluated for 23 deposit banks and 3 participitation banks from 2005/December to 2018/September. The models have been analized with panel corrected standard errors Prais-Winsten regression (since there is autoregression for including lagged variable of dependent variables within the models in addition to heteroscedasticity problem). Return on assets, return on equity and net interest margin (only for commercial banks) have been used in models. In conclusion, findings have been interpretated and actions that banks should take have been presented.