Determinants of non-performing consumer loans for Turkey: ARDL bounds testing approach
Purpose – the aim of this study is to specify the factors affecting the non-performing consumer loans in deposit banks operating in Turkey. Besides the internal factors specific to banks, the effect of macroeconomic factors is also investigated. Research methodology – monthly data of deposit ban...
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| Format: | Article |
| Language: | English |
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Vilnius Gediminas Technical University
2022-12-01
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| Series: | Business, Management and Economics Engineering |
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| Online Access: | https://journals.vilniustech.lt/index.php/BMEE/article/view/16936 |
| _version_ | 1811197363793952768 |
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| author | Şeyma Yilmaz Küçük |
| author_facet | Şeyma Yilmaz Küçük |
| author_sort | Şeyma Yilmaz Küçük |
| collection | DOAJ |
| description |
Purpose – the aim of this study is to specify the factors affecting the non-performing consumer loans in deposit banks operating in Turkey. Besides the internal factors specific to banks, the effect of macroeconomic factors is also investigated.
Research methodology – monthly data of deposit banks operating in Turkey and data on macroeconomic indicators for the period 2005:1–2021:12 is used is the study. With these data, ARDL bound testing approach is applied. If there is cointegration relation between variables, the long and short run coefficients are estimated.
Findings – with the two different models created in the study, it has been specified that macroeconomic variables and internal variables have a cointegration relationship with non-performing loans. The rise in loan interest rates and unemployment rate increase the rate of non-performing consumer loans. Conversely, the increase in deposit interest rates and the dollar exchange rate decreases the rate of non-performing consumer loans. For internal factors, it is determined that the increase in the capital adequacy standard ratio and the return on assets decreases the ratio of non-performing consumer loans.
Research limitations – the major limitation of this study is to research only the factors affecting the non-performing consumer loans ratio for Turkey.
Practical implications – the results obtained in the study are valuable for bank managers and investors. Administrative decisions and investment decisions by considering the factors affecting the non-performing consumer loans ratio will increase the performance of both groups.
Originality/Value – studies in the literature generally consider non-performing loans for banks as a whole. However, determining the factors affecting the non-performing loans ratio on the basis of loan types will make a significant contribution to the literature. For this reason, the factors affecting the non-performing consumer loans for the Turkish market is investigated, thus contributing to the literature.
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| first_indexed | 2024-04-12T01:13:27Z |
| format | Article |
| id | doaj.art-70df164081574223aac0026eb6368574 |
| institution | Directory Open Access Journal |
| issn | 2669-2481 2669-249X |
| language | English |
| last_indexed | 2024-04-12T01:13:27Z |
| publishDate | 2022-12-01 |
| publisher | Vilnius Gediminas Technical University |
| record_format | Article |
| series | Business, Management and Economics Engineering |
| spelling | doaj.art-70df164081574223aac0026eb63685742022-12-22T03:54:03ZengVilnius Gediminas Technical UniversityBusiness, Management and Economics Engineering2669-24812669-249X2022-12-0120210.3846/bmee.2022.16936Determinants of non-performing consumer loans for Turkey: ARDL bounds testing approachŞeyma Yilmaz Küçük0Çankırı Karatekin University, Çankırı, Turkey Purpose – the aim of this study is to specify the factors affecting the non-performing consumer loans in deposit banks operating in Turkey. Besides the internal factors specific to banks, the effect of macroeconomic factors is also investigated. Research methodology – monthly data of deposit banks operating in Turkey and data on macroeconomic indicators for the period 2005:1–2021:12 is used is the study. With these data, ARDL bound testing approach is applied. If there is cointegration relation between variables, the long and short run coefficients are estimated. Findings – with the two different models created in the study, it has been specified that macroeconomic variables and internal variables have a cointegration relationship with non-performing loans. The rise in loan interest rates and unemployment rate increase the rate of non-performing consumer loans. Conversely, the increase in deposit interest rates and the dollar exchange rate decreases the rate of non-performing consumer loans. For internal factors, it is determined that the increase in the capital adequacy standard ratio and the return on assets decreases the ratio of non-performing consumer loans. Research limitations – the major limitation of this study is to research only the factors affecting the non-performing consumer loans ratio for Turkey. Practical implications – the results obtained in the study are valuable for bank managers and investors. Administrative decisions and investment decisions by considering the factors affecting the non-performing consumer loans ratio will increase the performance of both groups. Originality/Value – studies in the literature generally consider non-performing loans for banks as a whole. However, determining the factors affecting the non-performing loans ratio on the basis of loan types will make a significant contribution to the literature. For this reason, the factors affecting the non-performing consumer loans for the Turkish market is investigated, thus contributing to the literature. https://journals.vilniustech.lt/index.php/BMEE/article/view/16936non-performing loansconsumer loansTurkish banking sector |
| spellingShingle | Şeyma Yilmaz Küçük Determinants of non-performing consumer loans for Turkey: ARDL bounds testing approach Business, Management and Economics Engineering non-performing loans consumer loans Turkish banking sector |
| title | Determinants of non-performing consumer loans for Turkey: ARDL bounds testing approach |
| title_full | Determinants of non-performing consumer loans for Turkey: ARDL bounds testing approach |
| title_fullStr | Determinants of non-performing consumer loans for Turkey: ARDL bounds testing approach |
| title_full_unstemmed | Determinants of non-performing consumer loans for Turkey: ARDL bounds testing approach |
| title_short | Determinants of non-performing consumer loans for Turkey: ARDL bounds testing approach |
| title_sort | determinants of non performing consumer loans for turkey ardl bounds testing approach |
| topic | non-performing loans consumer loans Turkish banking sector |
| url | https://journals.vilniustech.lt/index.php/BMEE/article/view/16936 |
| work_keys_str_mv | AT seymayilmazkucuk determinantsofnonperformingconsumerloansforturkeyardlboundstestingapproach |