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- Title
DETERMINANTS OF ISLAMIC BANK PROFITABILITY IN TURKEY: BANK SPECIFIC FACTOR ANALYSIS.
- Authors
GÖRÜŞ, Muhammed Şehid; ÖZGÜR, Önder
- Abstract
The aim of this study is to estimate the effects of bank specific factors on profitability of Islamic banks in Turkey. Ordinary Least Squares (OLS) method is used by using monthly real data for the period 2006M1-2016M2. Aggregated Islamic banks’ data which covers Albaraka Türk Participation Bank, Bank Asya, Kuveyt Turk Participation Bank Inc., Türkiye Finans Participation Bank, and Ziraat Participation Bank are used in this study. Return on Asset (ROA) is determined as a dependent variable of this study. In addition, equity to total assets (ETA), loan quality (LQ), loan to total assets (LTA), net interest margin (NIM), operational expenses to total assets (OETA), market share (MS), and non-interest income to total assets (NII) are included to model as determinants of bank profitability. Empirical results suggest that ETA, NIM, and MS have positive effect on bank profitability. Coefficient of NIM which is estimated as 0.432 can be described as the strongest determinant that affects the bank profitability. Furthermore, negative developments on Bank Asya since 2014 have affected bank profitability of Islamic Banks in Turkey, negatively.
- Subjects
ISLAMIC finance; BANK profits; KUVEYT Turk Participation Bank Inc.; MARKET share; LEAST squares
- Publication
Sakarya Journal of Economics / Sakarya Iktisat Dergisi, 2016, Vol 5, Issue 2, p1
- ISSN
2147-0790
- Publication type
Article