An Empirical Study on the Key Determinants of Credit Risk in the Banking Sector

The purpose of this study, the banking sector in Turkey is to identify the factors that influence their lending rates followed. The purpose of this study is to detect the factors that influence the rate of NPLs in the banking sector in Turkey. Quarterly financial data of banks operating in Turkey was used for this purpose. Quarterly financial data of banks operating in Turkey was used for this purpose. The first three banks with the largest volume operating between 2014-2017 were included in the analysis. The analysis was performed by method of panel data regression. The analysis was performed by method of panel data regression. The results of the study show that the variables such as asset profitability, bank size, net interest margin, finance deficit and return on equity among bank specific variables were statistically significant to a 99% confidence level. The results of the study show that the variables such as asset profitability, bank size, net interest margin, finance deficit and return on equity among bank specific variables were statistically significant to a 99% confidence level. There was a statistically significant relationship between the gross domestic product ratio which is macroeconomic variable and capital adequacy ratio variable and the credit risk at the 90% confidence level. These results are important and specific in terms of showing which variables should be taken into the foreground in managing non-performing loans in the banking sector, namely credit risk