INTERNAL DETERMINANTS OF COMMERCIAL BANKS PROFITABILITY: COMPARATIVE ANALYSIS IN DOMESTIC AND FOREIGN CAPITAL BANKS
TİCARİ BANKALARDA KARLILIĞIN İÇSEL BELİRLEYİCİLERİ: YERLİ VE YABANCI SERMAYELİ BANKALARDA KARŞILAŞTIRMALI ANALİZİ

Author : Rıfat KARAKUŞ -- İsrafil ZOR - Şeyma YILMAZ KÜÇÜK
Number of pages : 379-398

Abstract

The aim of this study is to determine internal factors affecting profitability in commercial banks comparatively for domestic and foreign banks. In this study, panel data analysis was performed by using the data between 2006 and 2015 of 12 domestic and 17 foreign capital commercial banks. In order to express profitability in the study, return on assets, return on equity and net interest margin are used as dependent variables. As a result of the study, in which ten internal factors were determined as independent variables, both differences and similarities of internal factors affecting profitability in domestic and foreign commercial banks are established. Asset size, equity to total assets, loan loss provisions to total loans and non-interest incomes to total assets affect return on assets positively in domestic banks while non-interest expenditures to total assets affects negatively. In foreign banks, equity to total assets and non-interest income to total assets affect return on assets positively. The asset size and equity to total assets also affect the return on equity for domestic and foreign banks positively. Moreover, for domestic banks non-interest income to total assets domestic banks and for foreign banks liquid assets to total assets are the other factors affecting the return on equity in the positive direction. Finally, equity to total assets and loan loss provisions to total loans are the factors that have a positive effect on the net interest margin for the domestic and foreign banks.

Keywords

Commercial Banks, Return on Assets, Return on Equity, Net Interest Margin, Internal Factors

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