Influencing Factors of Net Interest Margin in Turkish Banking Sector

Authors

  • Serhat Yuksel Konya Food and Agriculture University
  • Sinemis Zengin

Abstract

The aim of this paper is to define the influencing factors of net interest margin in Turkish banking sector. Within this scope, the effects of 14 explanatory variables on net interest margin were analyzed. Moreover, quarterly data for the period between 2003 and 2014 was used in this study. After that, we created a model by using MARS method so as to illustrate the relationship. The major finding in this study is that net interest margin is negatively related with non-interest income, non-performing loans, total assets and exchange rates. According to these results, it was determined that banks should focus on the quality of the assets in order to increase net interest margin. In addition to this situation, volatility in exchange rates should also be taken into the consideration by the banks for this situation.

Keywords: Banking; Net Interest Margin; MARS; Turkey

JEL Classifications: E43, G2, G21, O16

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Author Biography

Serhat Yuksel, Konya Food and Agriculture University

Serhat Yüksel is an Assistant Professor of the Faculty of Social and Human Science at Konya Food and Agriculture University, Konya-Turkey. Dr. Yüksel has a BS in Business Administration from Yeditepe University (2006), an MA from Economics department of Bogazici University (2008) and a PhD in Banking from Marmara University (2015). His research interests lie in the banking, finance, financial crisis and macroeconomics. He is in the editorial board of International Journal of Finance and Banking Studies (IJFBS).

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Published

2017-01-13

How to Cite

Yuksel, S., & Zengin, S. (2017). Influencing Factors of Net Interest Margin in Turkish Banking Sector. International Journal of Economics and Financial Issues, 7(1), 178–191. Retrieved from https://econjournals.com/index.php/ijefi/article/view/3235

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Articles