DETERMINANTS OF BANK PROFITABILITY: EVIDENCE FROM LISTED AND NON-LISTED BANKS IN TURKEY

Abstract

Purpose - The aim of this study is to determine the bank-specific, sector-specific and macroeconomic factors that affect the profitability of 23 deposit banks in Turkey. Methodology- in this study, we employ panel regression analyzes as well as mean and median tests. Our study using quarterly data covering the period 2005Q1-2015Q4 is divided into two groups: listed banks and non-listed banks. Findings- According to the results of the mean and median tests, there are significant differences between the listed banks and non-listed banks in terms of bank-specific variables. Regression results also indicate that the bank profitability is significantly affected by the variables such as bank size, bank capital, liquidity risk, economic growth, inflation, policy rate, exchange rate, and market concentration. Conclusion- When our results are evaluated in general, it could be said that the factors affecting profitability significantly differ according to whether the banks are traded at the Borsa Istanbul.