Analysis Of The Macroeconomic Factors Determining The Asset Profitability of The Turkish Banking System in The Period of 2010-2020

Özgür Özkan

doi:10.32602/jafas.2021.013

Abstract

Analysis Of The Macroeconomic Factors Determining The Asset Profitability of The Turkish Banking System in The Period of 2010-2020

Highlights

Developments after 2008 global financial crisis has shown the central banks of the developed countries that faced the crisis that traditional monetary policies were insufficient in recovering economies and achieving price stability
There is a causality link between non-performing loans (NPLs) and MB funding cost (FONCOST), which cannot be seen in the error correction model, and ROA, but their short-term effects on banking profitability are not clear
The estimation finding that changes in real exchange rates may affect bank profitability negatively reveals the importance of exchange rate risk for the banking sector

Summary

Introduction

Developments after 2008 global financial crisis has shown the central banks of the developed countries that faced the crisis that traditional monetary policies were insufficient in recovering economies and achieving price stability. He found a linear relationship between credit expansion and financial crises in his study findings It is not clear in the literature whether the effects of unconventional monetary policies on the banking sector are on profitability or on risk. The study finds that the inflation rate has a negative effect on the profitability of the bank, while the economic growth, monetary expansion and stock market index have a positive effect. Data Set, Method, and Findings In this study, which aims to analyze the domestic and foreign factors that determine the banking sector profitability rate (ROA), the functional relationship between dependent and independent variables is as follows: Where, β is constant, ROA, bank return on assets ratio; ε, error term; X is represented as the matrix of factors affecting bank profitability (ROA).

ROA CPI REER GOLDEN NPLs BİSTFİN VIX FONCOST

Actual sample size

Conclusions