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Analysis of the Factors Determining the Capital Adequacy Ratio in the Banking Sector (Bankacılık Sektöründe Sermaye Yeterlilik Rasyosunu Belirleyen Faktörlerin Analizi)

Author

Listed:
  • Citak, Fatma

    (Amasya University)

  • Kandil Goker, Ilkut Elif

    (Kırıkkale University)

Abstract

Capital adequacy ratio is considered as an important indicator in the risk and profitability management of the banks, which are considered as the most fundamental element of the financial system due to their intermediation activities. Turkey has made many regulations for banks' capital structure after the experienced financial crisis. Since 2006, it is aimed to strengthen the banking system with a minimum capital adequacy ratio (12%) above the standard ratio of 8% set by the Basel criteria. In this sense, it is important to identify the factors that affect the capital adequacy ratio, which is considered as an important tool of risk and profitability management The commercial banks operating in Turkey and whose complete financial data were available were used in the study and panel data analysis was conducted. According to the findings, it was determined that there is a significant relationship between the capital adequacy ratio and the banks' total asset size, deposit/total asset ratio, loan/total asset ratio, interest margin and non-performing loan/total loan ratios.

Suggested Citation

  • Citak, Fatma & Kandil Goker, Ilkut Elif, 2020. "Analysis of the Factors Determining the Capital Adequacy Ratio in the Banking Sector (Bankacılık Sektöründe Sermaye Yeterlilik Rasyosunu Belirleyen Faktörlerin Analizi)," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 11(1), pages 169-185, January.
    • Handle: RePEc:ris:buecrj:0464
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    More about this item

    Keywords

    Capital Adequacy Ratio; Commercial Banks; Turkish Banking Sector; Panel Data Analysis;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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