The Role of Capital in Banks, Its Determinants and Management of Capital Structure: The Case of Türkiye

Adnan Güzel

Article Details

The Role of Capital in Banks, Its Determinants and Management of Capital Structure: The Case of Türkiye

Authors:

Adnan Güzel

Publisher:

Ankara Hacı Bayram Veli University

Main Topics:

Finans

Journal:

Ankara Hacı Bayram Veli Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi Vol.25 Issue 2, pp.539-566

Document Type:

Article

Publication Date:

9/2023

Document Language:

Turkish

Document ID (Org No.):

2001298007

pISSN:

2667-405X

Keywords:

Abstract:

 Banks maintain their activities mostly with external resources as well as their own equity. Determining the amount of capital that banks should hold according to their financial structures and activities is one of the most important indicators of the efficiency of resource, credit, risk management and financial soundness. In this study; firstly the role and importance of capital in banks and the principles of capital management are examined, then the determinants of banks optimal capital requirement and capital management are analyzed. The research realized by using panel data analysis of the period 2002Q1-2021Q4 of the 15 banks having the highest share in the Turkish Banking System. In the model created, the capital adequacy ratio is dependent variable; net interest margin, return on assets and equity, non-performing loans ratio, liquidity ratio, leverage ratio, loandeposit ratio, operating expenses ratio, total assets etc. independent endogenous variable; The inflation rate, USDollar buying rate, growth rate and average loan-deposit interest rates are taken as macroeconomic variables. A statistically significant and positive relationship was found between the capital adequacy ratio and the net interest margin, the share of the bank in the sector, the ratio of non-interest incomes to non-interest expenses and the average dollar interest. Again, there is a statistically significant and negative relationship between the return on assets, liquidity ratio, total depositstotal resources ratio, non-performing loans grosstotal loans and receivables ratio, liquid assetstotal assets ratio, leverage ratio and average TL loan interest variables and capital adequacy ratio. However, no statistically significant relationship was found between total asset size, average annual growth rate, inflation rate and capital adequacy ratio.

 Banks maintain their activities mostly with external resources as well as their own equity. Determining the amount of capital that banks should hold according to their financial structures and activities is one of the most important indicators of the efficiency of resource, credit, risk management and financial soundness. In this study; firstly the role and importance of capital in banks and the principles of capital management are examined, then the determinants of banks optimal capital requirement and capital management are analyzed. The research realized by using panel data analysis of the period 2002Q1-2021Q4 of the 15 banks having the highest share in the Turkish Banking System. In the model created, the capital adequacy ratio is dependent variable; net interest margin, return on assets and equity, non-performing loans ratio, liquidity ratio, leverage ratio, loandeposit ratio, operating expenses ratio, total assets etc. independent endogenous variable; The inflation rate, USDollar buying rate, growth rate and average loan-deposit interest rates are taken as macroeconomic variables. A statistically significant and positive relationship was found between the capital adequacy ratio and the net interest margin, the share of the bank in the sector, the ratio of non-interest incomes to non-interest expenses and the average dollar interest. Again, there is a statistically significant and negative relationship between the return on assets, liquidity ratio, total depositstotal resources ratio, non-performing loans grosstotal loans and receivables ratio, liquid assetstotal assets ratio, leverage ratio and average TL loan interest variables and capital adequacy ratio. However, no statistically significant relationship was found between total asset size, average annual growth rate, inflation rate and capital adequacy ratio.

 Banks maintain their activities mostly with external resources as well as their own equity. Determining the amount of capital that banks should hold according to their financial structures and activities is one of the most important indicators of the efficiency of resource, credit, risk management and financial soundness. In this study; firstly the role and importance of capital in banks and the principles of capital management are examined, then the determinants of banks optimal capital requirement and capital management are analyzed. The research realized by using panel data analysis of the period 2002Q1-2021Q4 of the 15 banks having the highest share in the Turkish Banking System. In the model created, the capital adequacy ratio is dependent variable; net interest margin, return on assets and equity, non-performing loans ratio, liquidity ratio, leverage ratio, loandeposit ratio, operating expenses ratio, total assets etc. independent endogenous variable; The inflation rate, USDollar buying rate, growth rate and average loan-deposit interest rates are taken as macroeconomic variables. A statistically significant and positive relationship was found between the capital adequacy ratio and the net interest margin, the share of the bank in the sector, the ratio of non-interest incomes to non-interest expenses and the average dollar interest. Again, there is a statistically significant and negative relationship between the return on assets, liquidity ratio, total depositstotal resources ratio, non-performing loans grosstotal loans and receivables ratio, liquid assetstotal assets ratio, leverage ratio and average TL loan interest variables and capital adequacy ratio. However, no statistically significant relationship was found between total asset size, average annual growth rate, inflation rate and capital adequacy ratio.

 Bankalar, faaliyetlerini kendi özkaynaklarının yanı sıra büyük oranda dış kaynaklarla sürdürmektedirler. Bankaların finansal yapıları ve faaliyetlerine göre bulundurmaları gereken sermaye miktarı, kaynaklarının, kredi portföyü ile risk yönetiminin etkinliği ve finansal sağlamlığının en önemli göstergelerindendir. Bu nedenle çalışmada; Türk Bankacılık sisteminde sermayenin rolü, önemi ve sermaye yönetiminin ilkeleri incelenmiş, bankaların optimal sermaye gereksiniminin belirleyicileri ve sermaye yönetimi analiz edilmiştir. Araştırma, Türk bankacılık sisteminde faaliyet gösteren ve aktif büyüklüğü yönünden sektörde en yüksek paya sahip 15 bankanın 2002Q1-2021Q4 dönemini kapsayan üçer aylık dönemler halinde sağlanan veriler panel veri analizi kullanılarak gerçekleştirilmiştir. Oluşturulan modelde bankaların sermaye yeterlik rasyoları bağımlı değişken; net faiz marjı, aktif ve özkaynak kârlılığı, tahsili gecikmiş alacaklar oranı, likidite oranı, kaldıraç oranı, kredimevduat oranı, faaliyet giderleri oranı, toplam varlıklar vb bağımsız içsel değişken; ortalama yıllık tüketici enflasyon oranı, ABD Dolar alış kuru, yıllık ekonomik büyüme oranı ile ortalama kredi-mevduat faiz oranları makro ekonomik değişkenler olarak alınmıştır. Yapılan analiz sonucunda; sermaye yeterlilik rasyosu ile net faiz marjı, bankanın sektör içindeki payı, faiz dışı gelirlerin faiz dışı giderlere oranı ve ortalama dolar faizi arasında istatistiksel olarak anlamlı ve pozitif yönlü bir ilişki bulunmuştur. Yine aktif getirisi, likidite oranı, toplam mevduattoplam kaynaklar oranı, tahsili gecikmiş alacaklar brüttoplam kredi ve alacaklar oranı, likit varlıklartoplam varlıklar oranı, kaldıraç oranı ve ortalama TL kredi faizi değişkenleri ile sermaye yeterlilik rasyosu arasında istatiksel olarak anlamlı ve negatif yönlü etki belirlenmiştir. Ancak, toplam varlık büyüklüğü, ortalama yıllık büyüme oranı ve enflasyon oranı ile sermaye yeterlilik rasyosu arasında istatistiksel olarak anlamlı bir ilişki tespit edilememiştir.

Article Details

The Role of Capital in Banks, Its Determinants and Management of Capital Structure: The Case of Türkiye

Authors:

Adnan Güzel

Publisher:

Ankara Hacı Bayram Veli University

Main Topics:

Finans

Journal:

Ankara Hacı Bayram Veli Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi Vol.25 Issue 2, pp.539-566

Document Type:

Article

Publication Date:

9/2023

Document Language:

Turkish

Document ID (Org No.):

2001298007

pISSN:

2667-405X

Banking Sector

Capital Adequacy Ratio

Financial Soundness

Capital Structure

Panel Data AnalysisBankacılık Sektörü

Sermaye Yeterlik Oranı

Finansal Sağlamlık

Sermaye Yapısı

Panel Veri Analizi

Issues

Article Details

Authors: Adnan Güzel

Publisher: Ankara Hacı Bayram Veli University

Main Topics: Finans

Journal: Ankara Hacı Bayram Veli Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi Vol.25 Issue 2, pp.539-566

Document Type: Article

Publication Date: 9/2023

Document Language: Turkish

Document ID (Org No.): 2001298007

pISSN: 2667-405X

Issues

Authors:

Adnan Güzel

Publisher:

Ankara Hacı Bayram Veli University

Main Topics:

Finans

Journal:

Ankara Hacı Bayram Veli Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi Vol.25 Issue 2, pp.539-566

Document Type:

Article

Publication Date:

9/2023

Document Language:

Turkish

Document ID (Org No.):

2001298007

pISSN:

2667-405X