Master's Theses

Department

Economics, Finance, & Accounting

Degree Name

Master of Business Administration (MBA)

Abstract

This paper examines the profitability of Turkish commercial banks during the period 2005 – 2014. We use bank – specific determinants to predict the following years’ profitability measured by return on assets (ROA). Among the performance measures, the amount of net interest income as a proportion of total operating income is positive related to profitability. It remains important for banks to loan money out at a rate higher than their cost of capital. Non-interest income as a proportion of total assets is strongly positively related to profitability. Consumer loans as a proportion of total loans is negatively related to profitability. Our findings indicate that while the traditional source of bank profits from lending remains crucial, diversifying away from consumer loans into earning income from non-interest sources is important for enhancing bank profitability.

Keywords

Determinants of bank profitability, non-interest income, Turkish banks, Banking sector, Return on assets

Advisor

Dr. Glenn Growe

Date of Award

Spring 2017

Document Type

Thesis

Rights

© The Author(s)

Comments

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