The Relationship Between Credit Volumes and Profitability: Findings from the BIST Banking Index
Chapter from the book: Çilek, A. & Şeyranlıoğlu, O. (eds.) 2024. Current Applied Studies in the Field of Finance.

Nevzat Çalış
Bandırma Onyedi Eylül University

Synopsis

In this study, the effect of the loan amount given by the banks operating in the BIST banking index on the profitability of the banks was examined. The data for the periods 2009-2023 were analysed with the help of regression analysis. Two different models were created and ROA and ROE were determined as dependent variables. Total loans were determined as independent variables, while Non-Performing Loans / Total Loans, Shareholders' Equity / Total Assets, Deposits / Total Assets and Liquid Assets / Total Assets ratios were used as control variables. As a result of the study, a negative and significant relationship was found between ROA and NPL at a significance level of 5%, and between ROE and NPL at a significance level of 1%. In addition, a positive relationship was found between ROA and equity-fixed assets/total assets ratio. In addition, significant relationships were found between ROA and equity/total assets and liquid assets/total assets ratios at the 10% significance level. On the other hand, a positive correlation was found between the equity/total assets ratio and ROE, indicating that a stronger equity structure of banks could increase their return on equity.

How to cite this book

Çalış, N. (2024). The Relationship Between Credit Volumes and Profitability: Findings from the BIST Banking Index. In: Çilek, A. & Şeyranlıoğlu, O. (eds.), Current Applied Studies in the Field of Finance. Özgür Publications. DOI: https://doi.org/10.58830/ozgur.pub488.c2032

License

Published

October 22, 2024

DOI