Akademik Veri Yönetim Sistemi
IBAD Sosyal Bilimler Dergisi, sa.7, ss.393-402, 2020 (Hakemli Dergi)
ASSESSING THE IMPACT OF LIQUIDITY ON PROFITABILITY: AN EVIDENCE FROM TURKISH BANKING SECTOR
Abstract
The purpose of this study is to assess
the impact of liquidity and profitability of Turkish banks. The study is based
on panel data collected from website of the Association of Banks of Turkey. We
select 10 biggest banks of Turkey based on asset size as on 31.12.2017 and used
10 years data ranging from 2008-2017. Loan Deposit,
Deposit Asset, Liquid Asset to TA, Liquid Asset to Short- term Liability and
Liquid Assets to Deposits and Non-Deposit Resources Ratio has been considered as
a proxy of liquidity and average ROA and average ROE has been considered as a proxy
of profitability. We analyze the data through statistical techniques namely
descriptive statistics, correlations and regressions with the support of EViews
8. We run Random effect model in our study.
The results
of the study reveal that Loan Deposit Ratio has
significant negative influence on both ROE and ROA. Liquid Asset to Total Asset
ratio also has significant negative influence on both ROE and ROA. Deposit
Asset Ratio has a significant negative influence on ROA but insignificant
negative influence on ROE. Moreover, Liquid Asset to Deposit and Non-Deposit
Resources Ratio has a significant negative impact on ROE but insignificant
positive impact on ROA.
Key Words: Liquidity,
Profitability, Banking Sector, Turkey.