IDEAS home Printed from https://ideas.repec.org/a/spt/fininv/v2y2013i4f2_4_7.html
   My bibliography  Save this article

Determining Impacts on Non-Performing Loan Ratio in Turkey

Author

Listed:
  • Metin Vatansever
  • Ali HepÅŸen

Abstract

Banking sector is an essential part of a nation's economy and represents one of the most important components of a nation's capital. Similarly, the loan portfolio represents an important component of a bank’s total assets. These assets generate huge interest income which is a critical measure of the bank’s financial performance and stability. Therefore, the non-performing loan ratio is a critical tool to measure a bank’s performance. There is recently a growing recognition between macroeconomic indicators, bank-level factors and the non-performing loans (NPLs) ratio. The purpose of this study is to investigate whether there is a significant relationship between macroeconomic indicators, bank-level factors and non-performing loan ratio in Turkey. In this study linear regression models and cointegration analysis are utilized to determine the significant relations between the periods from January 2007 to March 2013. Our empirical results show that debt ratio, loan to asset ratio, real sector confidence index, consumer price index, EURO/ Turkish lira rate, USD/ Turkish lira rate, money supply change, interest rate, Turkey’s GDP growth, the Euro Zone’s GDP growth and volatility of the Standard & Poor’s 500 stock market index does not have significant effect to explain NPL ratio on multivariate perspective. On the other hand, industrial production index, Istanbul Stock Exchange 100 Index, inefficiency ratio of all banks negatively affect NPL ratio; unemployment rate, return on equity and capital adequacy ratio positively affect NPL ratio.

Suggested Citation

  • Metin Vatansever & Ali HepÅŸen, 2013. "Determining Impacts on Non-Performing Loan Ratio in Turkey," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 2(4), pages 1-7.
    • Handle: RePEc:spt:fininv:v:2:y:2013:i:4:f:2_4_7
    as

    Download full text from publisher

    File URL: http://www.scienpress.com/Upload/JFIA%2fVol%202_4_7.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liu, Suyi & Jin, Justin & Nainar, Khalid, 2023. "Does ESG performance reduce banks’ nonperforming loans?," Finance Research Letters, Elsevier, vol. 55(PA).
    2. Waelchli Boris, 2016. "A proximity based macro stress testing framework," Dependence Modeling, De Gruyter, vol. 4(1), pages 1-26, November.
    3. Mehmet Levent Erdas & Zeynep Ezanoglu, 2022. "How Do Bank-Specific Factors Impact Non-Performing Loans: Evidence from G20 Countries," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 11(2), pages 97-122.
    4. Asmaul Husna & Ibnu Satria, 2019. "Effects of Return on Asset, Debt to Asset Ratio, Current Ratio, Firm Size, and Dividend Payout Ratio on Firm Value," International Journal of Economics and Financial Issues, Econjournals, vol. 9(5), pages 50-54.
    5. Keshtgar, Nafiseh & Pahlavani, Mosayeb & Mirjalili, Seyed Hossein, 2020. "The Impact of Macroprudential Policies on the Vulnerability of the Banking System: Dynamic Panel Model," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 15(4), pages 357-379.
    6. Keshtgar, Nafiseh & Pahlavani, Mosayeb & Mirjalili, Seyed Hossein, 2020. "The Impact of Macroprudential Policies on the Vulnerability of the Banking System: Dynamic Panel Model," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 15(4), pages 357-379, October.
    7. Samar Issa & Gulhan Bizel & Sharath Kumar Jagannathan & Sri Sarat Chaitanya Gollapalli, 2024. "A Comprehensive Approach to Bankruptcy Risk Evaluation in the Financial Industry," JRFM, MDPI, vol. 17(1), pages 1-22, January.
    8. Adriana Daniela CIUREL & Tiberiu STOICA, 2019. "Determining Impacts on Non-Performing Loan Ratio in Romania," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 20(2), pages 155-170, March.
    9. Ayrton Psaila & Jonathan Spiteri & Simon Grima, 2019. "The Impact of Non-Performing Loans on the Profitability of Listed Euro-Mediterranean Commercial Banks," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 166-196.
    10. Laxmi Koju & Ram Koju & Shouyang Wang, 2018. "Does Banking Management Affect Credit Risk? Evidence from the Indian Banking System," IJFS, MDPI, vol. 6(3), pages 1-11, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spt:fininv:v:2:y:2013:i:4:f:2_4_7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eleftherios Spyromitros-Xioufis (email available below). General contact details of provider: http://www.scienpress.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.