The factors affecting the performance of the Turkish state and private banks: Panel data analysis

The financial sector has a structure of predominantly as banking in Turkey. For this reason, low or high performance shown in the banking sector affects financial system and so that affects the whole economy. In this study, it is tried to determined that the factors affecting the performance ofstate-owned and privately-owned deposit banks are operating in the Turkish banking sector between 2002-2011. For this purpose, in the study the effects of bank-specific variables and macroeconomic variables on the banks? return on assets, return on equity and net interest margin is investigated by using panel data analysis.At the end of the panel data analysis; it is concluded that the ratio of equity to total assets, the ratio of deposits to total assets and the ratio of non-interest expenses to total assets from the bank-specific variables and interest rate and the inflation rate from the macroeconomic variables have the significant impacts on the performance of the banks. It is also used that the dummy variable to demonstrate the difference between state-owned and private banks. Consequently profitability performance of private banks were found to be better than the state-owned banks. Keywords: Bank performance, return on assets, return on equity, net interest margin, panel data analysis