Testing the Factors that Determine the Profitability of Banks with a Dynamic Approach: Evidence from Turkey

IF 1.7 Q3 BUSINESS, FINANCE

Journal of Central Banking Theory and Practice Pub Date : 2023-01-01 DOI:10.2478/jcbtp-2023-0010

M. Doğan, Feyyaz Yildiz

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引用次数: 4

Abstract

Abstract The present study aims to identify the internal and external factors that affect the profitability of banks operating in Turkey. For this purpose, the study used data from 23 public, private, and foreign banks, covering the period from 2007 to 2020. Two dependent variables were used as the profitability indicators of banks, namely, the Return on Equity (ROE) and the Return on Assets (ROA). In order to increase the reliability of the models developed during the study, Dynamic Generalized Method of Moments (GMM) and Fixed Effect Model (FEM) were applied. Results of the analysis indicate a positive and statistically significant relation between inflation rate and GDP growth rate, and ROA and ROE. According to the results of GMM, there was a positive relation between ROA and ROE, and 1-year and 2-year lagged ROA and ROE. This situation may be explained by the fact that profits acquired in the Turkish banking sector are steady. ROA and ROE were observed to have a positive relation with inflation rate and economic growth rate. In other words, the increase in inflation rate and GDP growth rate positively affect profitability of public, private, and foreign banks.

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用动态方法检验决定银行盈利能力的因素：来自土耳其的证据

摘要本研究旨在确定影响在土耳其经营的银行盈利能力的内部和外部因素。为此，该研究使用了23家公共、私人和外国银行的数据，涵盖了2007年至2020年期间。银行的盈利能力指标有两个因变量，即股本回报率和资产回报率。为了提高研究过程中建立的模型的可靠性，采用了动态广义矩量法（GMM）和固定效应模型（FEM）。分析结果表明，通货膨胀率和国内生产总值增长率、ROA和ROE之间存在正的统计显著关系。根据GMM的结果，ROA与ROE呈正相关，1年和2年滞后ROA和ROE。这种情况可以解释为土耳其银行业获得的利润是稳定的。ROA和ROE与通货膨胀率和经济增长率呈正相关。换句话说，通货膨胀率和GDP增长率的上升对公共、私人和外国银行的盈利能力产生了积极影响。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Central Banking Theory and Practice BUSINESS, FINANCE-

CiteScore

2.80

自引率

57.10%

发文量

审稿时长

7 weeks

期刊介绍： Journal of Central Banking Theory and Practice is a scientific journal dedicated to publishing quality papers and disseminating original, relevant and applicable economic research. Scientific and professional papers that are published in the Journal of Central Banking Theory and Practice cover theoretical and practical aspects of central banking, monetary policy, including the supervision issues, as well as banking and management in central banks. The purpose of the journal is to educate the general public about the key issues that the central bankers globally face, as well as about contemporary research and achievements in the field of central banking theory and practice.