Determinants of capital adequacy ratio in Turkish Banks: A panel data analysis

By Ahmet Buuml, Yuuml, kşalvarcı, Hasan Abdioğlu. 2011

111 citations recorded by the source corpus.

The purpose of this study is to investigate the determinants of Turkish banks' capital adequacy ratio and its effects on financial positions of banks covered by the study. Data are obtained from banks' annual reports for the period 2006 - 2010. Panel data methodology is used in this study and analyzes relationships between independent variables; bank size (SIZE), deposits (DEP), loans (LOA), loan loss reserve (LLR), liquidity (LIQ), profitability (ROA and ROE), net interest margin (NIM) and leverage (LEV) and a dependent variable which is capital adequacy ratio (CAR). The results of the paper indicate that LOA, return on equity and LEV have a negative effect on CAR, while LLR and return on assets positively influence CAR. On the other hand, SIZE, DEP, LIQ and NIM do not appear to have any significant effect on CAR.   Key words: Capital adequacy ratio, Turkish banks, panel data analysis.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/d46dd9d66556c977970620658a2efa48581b6527

Citations in the corpus

• The impact of credit risk on profitability performance of commercial banks in Ethiopia (2015, unknown): “Consistent with the findings of Büyükşalvarcı and Abdioğlu (2011) and Qin and Dickson (2012), this study showed that CAR has a significant negative effect on ROE, but not on ROA. Holding all other explanatory variables constant, a one unit increase in CAR, ROE is expected to decrease by 1.02 units, ”