Scale Factor in the Performance of Deposit Banks – The Turkey Case

Abstract

The objective of this research was to clarify how the scale factor and bank performance relate to one another. It was observed that the benefit of scale emerged in various economic areas. In terms of efficient resource usage and cost advantage, the banking industry must determine if scale creates an advantage or not. Because banks’ financial services are strongly linked to the expansion of the economy. In this framework, banks were divided into three clusters as large-, medium-, and small-scaled banks and analyzed as two different panels, consisting of 7 large- and medium-scaled banks and 13 small-scaled banks, to explicate the factors influencing the performance of deposit banks between 2012:Q4-2020:Q3. As a result, the study’s findings showed that internal and macroeconomic variables, which were significant components regarding the scale structure of the banks’ performance, had a high explanatory power in the analysis of commercial banks and were crucial to the profitability of the banks. Even when deposit banks were categorized as Large-, Medium-, and Small-Scaled Banks, the chosen explanatory variables were significant and strong estimators.

Keywords

• mevduat bankaları
• banka performansı
• kümeleme analizi
• deposit banks
• bank performance
• cluster analysis