CREDİT RİSK, BANK PERFORMANCE, AND FİNANCİAL STABİLİTY: PANEL EVİDENCE FROM THE TURKİSH BANKİNG SECTOR
DOI:
https://doi.org/10.18623/rvd.v22.n4.3744Keywords:
Credit Risk, Financial Stability, Non-Performing Loans, Bank Performance, Emerging Market BanksAbstract
This study aims to examine the bank-specific and macroeconomic determinants of credit risk and financial stability in Türkiye, focusing on public, private, and foreign-owned banks. Panel data from 25 commercial banks covering the period 2013–2024 were analyzed. Credit risk and financial stability were measured using the Non-Performing Loans (NPL) ratio and the Z-score, respectively. Generalized Linear Models (Logit) were employed to assess the relationships between explanatory variables and these indicators. The findings indicate that higher profitability (ROA) and GDP per capita significantly reduce NPL ratios, while an increase in policy interest rates raises credit risk. For financial stability, capital adequacy (CAR) enhances bank resilience, whereas larger bank size (BS) and ROA are negatively associated with stability. Ownership structure does not have a statistically significant impact on either credit risk or financial stability. The results suggest that operational performance and macroeconomic conditions play a more crucial role than ownership type in determining credit risk and stability in Türkiye’s banking sector. Strengthening integrated risk management, maintaining strong capital buffers, and ensuring macroeconomic stability are essential for sustaining financial soundness and resilience in emerging markets.
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