Commercial Banks In Turkey Research Articles

The Relationship between Bank Capital, Risk-Taking and Profitability: Fresh Evidence from Panel Quantile Approach

This study aims to reveal the relationship between bank capital (BC), risk-taking, and profitability for commercial banks in Turkey using panel quantile regression models (QRPD) with non-additive fixed effects (NAFE). Accordingly, we consider the data of 18 commercial banks for 2012-2022. Firstly, we concluded a positive relationship between banks' risk-based capital (RBC) and traditional capital ratios (CR) and return on assets (ROA); in contrast there is a negative relationship between RBC and risk-weighted assets (RWATA) under all market conditions. Secondly, we found a positive relationship between the RBC and the provision for loan losses ratio (LLPTA) in other periods except for the contraction period; at the same time, there is a positive relationship between CR and LLPTA in other periods except for the expansion period. The findings also showed an inverted U-shaped relationship between RBC and the LLPTA and return on equity (ROE) and an N-shaped relationship between CR and ROE. Lastly, we discovered a positive relationship between RWATA and ROA and ROE in all market conditions, whereas a negative relationship exists between LLPTA and ROA. The findings provide valuable insights into the validity of the moral hazard and cost-skimping hypotheses, regulatory assumptions, agency, portfolio and risk-bearing profit theories in the commercial banking sector, and that risk, capital and profitability indicators are leading factors in banks' stability.

Stress resistance of commercial banks in Turkey and Kazakhstan

The stress resistance of banks is important for the entire financial system of the country, since the banking sector is the most important segment of the economy. Banks accumulate free resources and ensure the movement of money for the needs of the economy. Stress testing is one of the methods for assessing the stability of banks to various stressful situations in the financial market. In the economic literature, this aspect has been given enough attention, but to a greater extent with respect to certain types of risks. Studies have approached the issue of assessing the stress resistance of banks in different ways. Some considered the problem through the prism of assessing the probability of bankruptcy, others used an assessment of the dependence of banks' profitability on various factors. Most of the authors used regression, cluster, discriminant analysis and various stress testing methods. In this study, both classical methods are used - collection, synthesis, analysis, generalization, processing and visualization of data - and methods of stress testing and scenario modeling. Data collection was carried out on the basis of data from the Bloomberg information database for banks in Turkey and Kazakhstan. Unfortunately, not all commercial banks in Turkey and Kazakhstan managed to collect data for 2020-2022. At the same time, this article uses a scenario stress testing method based on the Bloomberg method. The analysis made it possible to determine that Turkish banks are more sensitive to crises, especially for such banks as Turkiye Sinai Kalkinma Bankasi and Sekerbank Turk AS, for which the values are always significantly higher than the median. Banks of Kazakhstan are more resistant to crises and less responsive to market changes, except for Kaspi.KZ JSC, whose performance is close to that of Turkish banks. Key words: Stress testing, banking, stress resistance, Bloomberg method, forecasting

Does Profitability Cause the Changes in Stock Prices? Evidence from the Turkish Banking Stocks

Stock prices reflect the future for investors. Profit and profitability ratios are considered as the data of the enterprises’ past. Accordingly, whether investors make investments decisions regarding profit and profitability factors and they cause the changes in stock prices are crucial issues to be examined. The aim of the study is to investigate the causality between several profitability factors and the change in the prices of banking stocks by performing the Emirmahmutoğlu & Köse (2011) bootstrap causality test on the quarterly data obtained from six commercial banks in Turkey over the period 2010: Q1 – 2020: Q4. The findings of the study reveal that especially the earnings per share figures account for the changes in the stock price of the banks. Nonetheless, such a causal relationship can be detected for neither return on assets nor return on equity.

Strategic Management and Performance of Commercial Banks in Turkey

Strategic management is for organizations to obtain a competitive edge over their rivals. Effective strategic management constantly keeps track of and tests the firm's tasks, leading to more operational performance, market share and productivity. Thus, the study sought to examine the effect of strategic management on the performance of commercial banks in Turkey. The study was literature-based and the inferences were made based on findings of the previous studies. The study results showed that strategic management had a positive effect on performance. The strategic management process aids a company and its management to the reason of and prepares for its long-term goals, satisfying the primary obligation of a board of directors. Moreover, strategic management is for organizations to obtain a competitive edge over their rivals. Strategic management is setting goals, procedures, and objectives to make a company or organization more competitive. The stages of strategic management incorporate setting goals or objectives, analysis, strategy formation, strategy implementation and strategy monitoring. Strategic management provides overall direction by developing plans and policies designed to achieve objectives and then allocating resources to implement the plans. Strategic management is for organizations to gain a competitive edge over their competitors. The study concluded that strategic management has a significant effect on performance. The study recommended that commercial banks in Turkey ensure that strategic management practices are included in the long-term goals. The workers and all individuals need to be trained on the strategic management process. In addition, the organization should be structured to open up all the communications channels in the organization. Functions must be defined clearly to ensure that no ambiguity will certainly show up. Keywords: Strategic Management, Performance, Commercial Banks, Turkey

Opening the Black-box of Bank Efficiency in Turkey with Two-stage Data Envelopment Analysis: A Study on Capital Adequacy Ratio

Banks constitute approximately 90% of the Turkish financial system, so an efficiently operating banking sector is essential for financial consolidation. To ensure the efficient functioning of the banking production process, capital adequacy ratio (CAR), which is a basic indicator in controlling financial risk, should be managed properly. Additionally, the production process of banks fits into a typical two-stage system, thus opening the black-box on bank efficiency is necessary for an accurate efficiency measurement. By focusing on the link between efficiency, risk and return, this study aims to present a two-stage efficiency evaluation of the commercial banks in Turkey for the year 2018. In addition to the efficiency scores, frontier projections are determined, and an examination is made on the CAR targets. The empirical findings indicate that the inefficiency in the Turkish banking sector mainly stems from the operational performance and the average efficiency score of the state-owned banks is the highest. According to the target values, a pattern is detected between the efficiency scores and CAR. We also conclude that the minimum capital adequacy of 10.5% set by Basel III is not high to guide the commercial banks in Turkey to the efficient frontier.

The Human Resource Management and the Profitability, in Turkish Banking Sector: Evidence Within the “Leap Period”

Since the concurrence reached its highest level at the last decades of the 20th century, the firms are in the search of gaining the competitive advantage. After have seen the impact of the strategic resources, scholar have focused to find the new ones. Human resource management had a considerable potential to contribute to the firm performance. In spite of evidence the relationship between the HRM and the firm performance, there are still some uncertainties: First, is it really acceptable to trust the perceptions of the respondents, particularly since they evaluate both HRM and the performance. And secondly, is it really certain that HRM ensures the profitability (but not the profitability ensures the HRM). In order to answer these questions, the annual activity reports (between 2010-2019) of the commercial banks in Turkey are analyzed. The data gathered from the HRM sections and the financial sheets are compared. Based on the intensity of new HRM practices starting and their impact on ROA, it is argued that HRM is one the factors that ensure the profitability, when it is driven in a leap period. Keywords: Strategic human resource management, human resource management, firm performance, ROA, leap period DOI: 10.7176/EJBM/13-8-08 Publication date: April 30 th 2021

A new alternative estimation method for Liu-type logistic estimator via particle swarm optimization: an application to data of collapse of Turkish commercial banks during the Asian financial crisis

In the existence of multicollinearity problem in the logistic model, some important problems may occur in the analysis of the model, such as unstable maximum likelihood estimator with very high standard errors, false inferences. The Liu-type logistic estimator was proposed as two-parameter estimator to overcome multicollinearity problem in the logistic model. In the existing previous studies, the (k, d) pair in this shrinkage estimator is estimated by two-phase methods. However, since the different estimators can be utilized in the estimation of d, optimal choice of the (k, d) pair provided using the two-phase approaches is not guaranteed to overcome multicollinearity. In this article, a new alternative method based on particle swarm optimization is suggested to estimate (k, d) pair in Liu-type logistic estimator, simultaneously. For this purpose, an objective function that eliminates the multicollinearity problem, provides minimization of the bias of the model and improvement of the model’s predictive performance, is developed. Monte Carlo simulation study is conducted to show the performance of the proposed method by comparing it with existing methods. The performance of the proposed method is also demonstrated by the real dataset which is related to the collapse of commercial banks in Turkey during Asian financial crisis.

Yönetim Kurulu Üyelerinin ve Yönetim Kurulu Özelliklerinin Türkiye’de Banka Performansı Üzerine Etkisi

This study analyzes the effect of board member’s characteristics (political, national and gender) and board characteristics (board size, CEO-chairman duality) on bank performance, with the main attention being on the political board directors, in Turkey. By making use of a sample of 31 commercial banks in Turkey, during the period of 2002-2013, our empirical evidence shows that political board directors have a significantly negative impact on bank performance. We found new evidence that not only political board directors inhibit bank performance, but politically connected banks also have less accounting performance than their nonconnected counterparts. Similarly, our results indicate that foreign board directors also affect negatively bankperformance. Furthermore, our results demonstrate that gender diversity, board size and CEO-Chairman duality has no impact on bank performance. Our results are robust to the alternative time-period and estimation models.

COMPARATIVE ANALYSIS OF BANKING PERFORMANCE OF COMERCIAL BANKS GROUPS. CASE STUDY: TURKEY VS. ROMANIA

The purpose of this article is to present a comparative analysis of performance between two commercial bank groups from Turkey and Romania. In conducting the study we have considered evaluating financial performance achieved by a group of commercial banks in Turkey and Romania in relation to the Eurozone during 1999-2016 and examine the level of liquidity of assets acquired during these 18 years of activity of these two banking groups, in comparison with the Eurozone. In this analysis there were tested three hypotheses based on the performance indicators used by the two banking trade groups and the indicators used in the specialty literature. Results and interpretations from this study/ testing were presented and interpreted, in the case of these two banking trade groups. The article ends with the authors’ conclusions related to comparative analysis of bank performance between the two commercial bank groups in Turkey and Romania.

Factors Impacting Bank Net Interest Margin and the Role of Monetary Policy: Evidence from Turkey

<p><em>In this study, we investigate factors affecting net interest margin (NIM) of commercial banks in Turkey. Especially, our results highlight the relation between unconventional monetary policy shocks and bank margins. To this end, first, we conduct an identification analysis about which parameters of asymmetric interest corridor framework are important in explaining variations in NIM. Using industry-level data, we show that there exists a pass through from BIST interbank overnight repo/reverse repo market rate and weighted average cost of funding (WACF) to bank loan and deposit rates. As a result of reduced-form Vector Autoregression (VAR) analysis we find the existence of a transmission mechanism from BIST rate and WACF to commercial loan rate, consumer loan rate and deposit rate. Same pass through to loan and deposit rates is also shown in individual bank level with the Panel Vector Autoregression (Panel VAR) analysis in the case of 16 commercial banks in Turkey during the period 2011Q1-2016Q1. After the identification analysis, we examine the relationship between NIM and policy rates through System Generalized Method of Moments (GMM) techniques by controlling bank specific, industry related and macroeconomic factors. We find that a change in the monetary policy rate has significant and positive impact on NIM. Among bank-specific factors, equity ratio and operating expenses are found to be significantly affecting NIM during the sample period. Our empirical findings also stress the significance of lag values of NIM. Estimations conducted with standardized variables indicate that economic significance of lag values and bank specific variables are larger than that of policy.</em></p>

Efficiency of commercial banks in Turkey and their comparison: application of DEA with Tobit analysis

This paper aims to investigate the technical and allocative efficiency scores of 23 commercial banks operating in Turkey between 2003 and 2012 by using data envelopment analysis (DEA). In the CCR model analysis, the number of technically inefficient banks rises from three to six and the number of allocatively inefficient banks falls from six to five within the given period. On the other hand the number of technically efficient banks falls from 22 to 19 whereas the number of allocatively efficient banks rises from 10 to 16 in the study period according to BCC model analysis. Subsequently, the efficiency scores of the companies are associated with the outputs in the Tobit regression, and we try to determine the decisiveness of the outputs on efficiency. According to our results Tobit analysis provides more appropriate results on allocative efficiency scores in comparison to technical efficiency scores with the same output compound.

Efficiency of commercial banks in Turkey and their comparison: application of DEA with Tobit analysis

This paper aims to investigate the technical and allocative efficiency scores of 23 commercial banks operating in Turkey between 2003 and 2012 by using data envelopment analysis (DEA). In the CCR model analysis, the number of technically inefficient banks rises from three to six and the number of allocatively inefficient banks falls from six to five within the given period. On the other hand the number of technically efficient banks falls from 22 to 19 whereas the number of allocatively efficient banks rises from 10 to 16 in the study period according to BCC model analysis. Subsequently, the efficiency scores of the companies are associated with the outputs in the Tobit regression, and we try to determine the decisiveness of the outputs on efficiency. According to our results Tobit analysis provides more appropriate results on allocative efficiency scores in comparison to technical efficiency scores with the same output compound.

Stock Market Development, Bank Concentration, Ownership Structure, and Bank Performance: Evidence from Turkey

Abstract. Using the the Two-Step Generalized Method of Moments (GMM) described by Arellano and Bond (1991) for dynamic panels, this paper analyzes the profitability of 25 commercial banks in Turkey over the period from 2003 to 2011.Our profitability determinants include bank-specific characteristics as well as industry-specific and macroeconomic factors, some of which have not been considered in previous studies. We conclude that the high bank profitability during these years is associated with a large percentage of loans in total assets, a low proportion of liquid asset, good efficiency and a low doubtful assets ratio. In addition, higher capital ratios also increase the bank’s return, but only when return on assets and return on equities is used as the profitability measure. We find evidence of economies of scale in the Turkish banking sector. Empirical results show that there is a negative relationship between financial development and profitability. We find also there is a positive relationship between bank concentration and bank performance in Turkish banking industry, consisting with the structure-conduct-performance (SCP) hypothesis. The results also suggest that there is a negative relation between the foreign ownership and profitability, indicating that foreign banks do not in general make relatively higher profit, at least during the period under the consideration. Keywords: Banking profitability, Stock markets, Concentration, Ownership, Turkey, GMM JEL classification: G21, C32, E44.

Evaluating the Relative Efficiency of Commercial Banks in Turkey: An Integrated AHP/DEA Approach

This study measures the relative efficiency of 13 commercial banks in Turkey for the year of 2011 with an integrated approach includes Analytic Hierarchy Process and Data Envelopment Analysis. It uses two inputs (personnel expenditures and number of branch) and four outputs (deposits-national currency, deposits-foreign currency and precious metal, cash loans, and non-cash loans) in terms of production approach. According to empirical result, state-owned commercial banks are efficient in both CCR (Charnes-Cooper-Rhodes) and BCC (Banker-Charnes-Cooper) model. However, foreign-owned commercial banks have the lower efficiency scores than both state-owned and private-owned commercial banks. The results also suggest that inefficient banks should especially improve their non-cash loans and should focus on their annual personnel expenditure. Moreover, more than half of the commercial banks are scale inefficiency. The results of the study may be useful for the bank managers in assessing their performance.

A Fuzzy Multi-Criteria Evaluation of the Operational Risk Factors for the State-Owned and Privately-Owned Commercial Banks in Turkey

ABSTRACT Developments in financial markets in recent years have made financial institutions give greater importance to the concept of risk management, especially by banks that lost enormous assets and suffered losses due to various risks. Nowadays, one of the risk groups that banks face is operational risk, which causes the losses that arise from insufficient or unsuccessful business processes, human and system failures, or external factors. In this study, operational risk factors are evaluated in a fuzzy environment by using a fuzzy analytic hierarchy process (FAHP) for the state-owned and privately-owned commercial banks in Turkey. According to our results, state-owned and privately-owned commercial banks in Turkey have differentiated with respect to the operational risk factors and also their sub-factors.

The impact of organizational culture on the relationship between shared leadership and team proactivity

PurposeThe purpose of this paper is to examine whether organizational culture moderates the relationship between shared leadership and team proactive behavior.Design/methodology/approachData were collected from 21 commercial banks in Turkey that had formally implemented work teams. The study used data obtained from 420 team members. Moderated hierarchical regression was used to examine the moderating role of organizational culture on the shared leadership and team proactive behavior relationship.FindingsShared leadership within a work team was positively related to team proactive behavior. The relationship of shared leadership with team proactivity is stronger in organizations with higher level of supportive culture.Research limitations/implicationsA practical implication of these results for leaders of management teams is that sharing some leadership roles and responsibilities within their teams with other members may have positive effects for the proactivity of the team as well as the satisfaction of the team members. The generalizability of the results may be limited by sources of funding of the banks studied and demographic factors such as participants' age, gender and organizational tenure.Originality/valueThe use of organizational culture as a moderator on this link is unprecedented. Although shared leadership within teams may increase job demands on members and require them to take on new roles, it seems to have positive effects on perceptions of their jobs. In addition, the extent to which an organization encourages a supportive culture makes a difference in the relationship of shared leadership with team proactivity. Finally, using a large number of samples from Turkish banking sector adds to the growing literature examining shared leadership in non‐Western settings.

The effect of scale and mode of ownership on the financial performance of the Turkish banking sector: results of a DEA-based analysis

Turkey and the International Monetary Fund (IMF) agreed to a stand-by arrangement at the outset of 2000. Consequently, Turkey implemented an exchange-rate based stabilization program to combat its high inflation. However, two financial crises followed: one in November, 2000 and the other in February, 2001. As the result some banks became problematic. This necessitated restructuring of the banking sector to increase its financial efficiency. This paper presents a financial performance index for commercial banks. The index allows one to observe the effects of scale and of the mode of ownership (public/domestic, private/domestic/foreign) on bank behavior and, therefore, on bank performance in a developing economy. It documents the effects of financial liberalization, cross-country movements, and the impact of financial crises originating in neighboring countries e.g. Russia. The study applies Data Envelopment Analysis (DEA) to selected fundamental financial ratios using 1989–99 data from commercial banks in Turkey. Year-by-year results explain the effects on this sector of major shifts in both national macro-economic policy and various international developments. The banks that were taken over by the regulatory government agency most recently in the analyzed period were observed to perform poorly with respect to their DEA performance index values.