The Effect of Non-Performing Loans on Sector Profitability in the Turkish Banking Sector
Abstract
The main purpose of this study is to determine the impact of non-performing loans (NPLs) on profitability of banking industry in Turkiye. In this study, in order to examine the basic indicators of profitability, non-performing receivables and consumer credit cards, non-performing housing and vehicle loans, non-performing consumer loans, consumer loans, loans and credit cards, net profit-loss and non-performing loans were compiled to generate a data set for the period between 2004 and 2018. Due to the different integration levels of the series obtained, models based on the autoregressive distributed lag (ARDL) approach, which is one of the time series regression methods, were established to analyze. Then, the effect of non-performing receivables on the banking sector profitability was examined. The initial findings reveal that the increase in non-performing receivables significantly reduced the profit of the banking sector.
Metrics
References
Aka, K. (2019). Banka Karlılığının Belirleyicileri: Türk Bankacılık Sektöründeki Katılım Bankaları Üzerine Ampirik Bir Uygulama. Social Sciences Research Journal, 8 (3), 21-39.
Akhtar, M. F., Ali, Khizer & Sadaqat Shama. (2011). Factors Influencing the Profitability of Islamic Banks of Pakistan. International Research Journal of Finance and Economics, 60, 125-132.
Aktaş, R. (2000) Sorunlu Kredilerde Erken Uyarı Modelleri, TBB Eğitim ve Tanıtım Grubu Seminer Notları, İstanbul, 10-11 Şubat 2000,15-16
Alper, D., Anbar A.(2011). Bank Specific and Macroeconomic Determinants of Commercial Bank Profitability: Empirical Evidence From Turkey, Business and Economics Research Journal, 2 (2), 139-152
Aydın, N. (2006). Bankacılık Uygulamaları. Anadolu Üniversitesi Yayınları
Bashir, A.H (2003). Determinants of Profitability in Islamic Banks: Some Evidence from The Middle East. Islamic Economic Studies, 11(1), 31-57.
Black,, J, Hasmınzade N. & Myles, G. (2009). Dictionary of Economics. Third Edition, USA,Oxford. DOI: https://doi.org/10.1093/acref/9780199237043.001.0001
Bodla, B.Singh, & Verma, R. (2006). Determinants of profitability of banks in India: A multivariate analysis. Journal of Services Research, 6(2), pp. 75-89.
Enders, W. (2008). Applied econometric time series.
Greene, W. H. (2003). Econometric Analysis. Pearson Education India.
Gülhan, Ü., & Uzunlar, E.(2011). Bankacılık Sektöründe Kârlılığı Etkileyen Faktörler: Türk Bankacılık Sektörüne Yönelik Bir Uygulama/Factors Influencing the Bank Profitability: an Apllication on Turkish Banking Sector. Atatürk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 15(1).
Güneş N,. (2015). Banka Kârlılığının Belirleyicileri: 2002-2012 Dönemi Türk Mevduat Bankaları Üzerine Bir İnceleme. Süleyman Demirel Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 20,(3),265-282.
Hamilton, J.D. (1994). Time Series Analysis Princeton University Press DOI: https://doi.org/10.1515/9780691218632
Iqbal, S., & Nosheen, S. (2023). Moderating impact of non-performing loans on the relationship between sustainable development goals and the financial performance of banks. Future Business Journal, 9. DOI: https://doi.org/10.1186/s43093-023-00224-1
Karamustafa, C. (2013), Türk Bankacılık Sektöründe Sorunlu Kredilerin Analizi Ve Uygulamaya Yönelik Politika Önerileri, Yayınlanmamış Yüksek Lisans Tezi, Galatasaray Üniversitesi
Kjosevski, J., & Petkovski, M. (2021). Macroeconomic and bank-specific determinants of non-performing loans: The case of Baltic States. Empirica, 48, 1009–10281. DOI: https://doi.org/10.1007/s10663-020-09491-5
Kütük, Y. (2011). Türkiye’de İntiharların Ekonomik ve Sosyal Göstergelerle İlişkisi. Yayınlanmamış Yüksek Lisans Tezi. İstanbul Teknik Üniversitesi
Kwiatkowski, D. Phıllıps, P. C, Schmıdt, P., & Shın, Y. (1992). Testing the null hypothesis of stationarity against the alternative of a unit root. Journal of Econometrics, 54(1-3), pp. 159-178. DOI: https://doi.org/10.1016/0304-4076(92)90104-Y
Majumder, T. H. ve Uddin, M. J. (2017). “The Determinants of Profitability of Nationalised Banks in Bangladesh”. International Journal of Economics and Business Research, 13(4), 335-348. DOI: https://doi.org/10.1504/IJEBR.2017.084380
Manz, F. (2019). Determinants of non-performing loans: What do we know? A systematic review and avenues for future research. Management Review Quarterly, 69(4), 351–3891. DOI: https://doi.org/10.1007/s11301-019-00156-7
Messai, A. S., & Jouini, F. (2013). Micro and Macro Determinants of Non-performing Loans. Economics Research International, 3(4), 852–860.
Nikolopoulos, K. I., & Tsalas, A. I. (2017). Non-performing Loans: A Review of the Literature and the International Experience. Palgrave Macmillan Studies in Banking and Financial Institutions. DOI: https://doi.org/10.1007/978-3-319-50313-4_3
Osuagwu, E. (2014). Determinants of Bank Profitability in Nigeria. International Journal of Economics and Finance, 6(12), 46-63. DOI: https://doi.org/10.5539/ijef.v6n12p46
Pesaran, M. H., Shın, Y., & Smıth, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289-326. DOI: https://doi.org/10.1002/jae.616
Selimler, H. (2015). Sorunlu Kredilerin Analizi, Banka Finansal Tablo Ve Oranlarına Etkisinin Değerlendirilmesi Finansal Araştırmalar ve Çalışmalar Dergisi 7(12), 131-172 DOI: https://doi.org/10.14784/jfrs.74107
Sufıan, F., & Chong, R. R. (2008). Determınants Of Bank Profitability In A Developing Economy: Empirical Evidence From The Philippines. Asian Academy of Management Journal of Accounting & Finance, 4(2). 91-112
Şahbaz, N. (2010), Türk Bankacılık Sektöründe Sorunlu Krediler ve Makroekonomik Etkileri: Türkiye Örneği Yayınlanmamış Yüksek Lisans Tezi Afyon Kocatepe Üniversitesi
Syed, A.A. (2021), "Determinants of Nonperforming Loans: A Review of Empirical Evidence", Özen, E., Grima, S. and Gonzi, R.D. (Ed.) New Challenges for Future Sustainability and Wellbeing (Emerald Studies in Finance, Insurance, and Risk Management), Emerald Publishing Limited, pp. 277-306. https://doi.org/10.1108/978-1-80043-968-920211015. DOI: https://doi.org/10.1108/978-1-80043-968-920211015
Vogiazas, S., & Nikolaidou, E. (2011). The determinants of non-performing loans in commercial banks. In Advances in Banking and Finance (pp. 1–15), Springer.
Yuca, H. (2012), Bankacılık Sektöründe Takipteki Krediler-Teminat İlişkisi: Türk Bankacılık Sektörü Üzerine Bir Uygulama YayınlanmamışDoktora Tezi, Kadir Has Üniversitesi.
