The Relationship Between Bank Size and Profitability: An Investigation on Deposit Banks in Turkey

Abstract

The aim of this study is to determine the relationship between the size and profitability of the publicly traded deposit banks in Turkey. The data set of the study consists of the annual reports of 10 deposit banks listed on Borsa Istanbul for the periods of 2005-2015 and panel data analysis method has been used in determining the so- called relationship. While profitability has been measured by Return on Assets (ROA) and Return on Equity (ROE) ratios, the bank size has been measured by natural logarithm of total assets and total credits. Additionally, total credits/ total assets ratio has been used as a control variable. The findings have shown that size has a positive impact on bank profitability. © Peter Lang GmbH.