Profitability determinants in Turkish banking: comparing Islamic and conventional banks under inflation and bond rate effects

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dc.authoridKılıç, Cüneyt / 0000-0003-0622-7145
dc.contributor.authorKazak, Hasan
dc.contributor.authorAkçan, Ahmet Tayfur
dc.contributor.authorKılıç, Cüneyt
dc.contributor.authorKılıçarslan, Abdullah
dc.date.accessioned2025-05-29T02:57:42Z
dc.date.available2025-05-29T02:57:42Z
dc.date.issued2025
dc.departmentÇanakkale Onsekiz Mart Üniversitesi
dc.description.abstractPurpose This study aims to compare the effects of exogenous factors, particularly inflation and bond interest rates, on the profitability of Islamic (participation) and conventional banks in Türkiye. Design/methodology/approach The Fourier function-enhanced Johansen cointegration test was applied to data covering the period 2005/Q1–2023/Q4. The stationarity levels of the variables were determined using the Zivot–Andrews unit root test, followed by a cointegration test, and long-run coefficient estimates were evaluated. Findings The results indicate that inflation positively affects bank profitability in both Islamic and conventional banking sectors, whereas bond interest rates have a negative impact. No significant difference was observed between the two banking models in terms of these effects. Furthermore, contrary to existing literature suggesting a positive relationship between bond interest rates and bank profitability, this study provides empirical evidence of a negative long-run impact. Originality/value This study contributes to the literature by demonstrating the negative effect of bond interest rates on bank profitability, challenging conventional claims. In addition, it highlights the similar sensitivities of Islamic and conventional banks to macroeconomic factors, providing valuable insights for policymakers. The findings have significant implications for both the Turkish banking sector and the global financial system.
dc.identifier.doi10.1108/JFRC-01-2025-0016
dc.identifier.issn1358-1988
dc.identifier.issn1740-0279
dc.identifier.scopus2-s2.0-105003259531
dc.identifier.scopusqualityQ3
dc.identifier.urihttps://doi.org/10.1108/JFRC-01-2025-0016
dc.identifier.urihttps://hdl.handle.net/20.500.12428/30144
dc.identifier.wosWOS:001472368900001
dc.identifier.wosqualityN/A
dc.indekslendigikaynakWeb of Science
dc.indekslendigikaynakScopus
dc.language.isoen
dc.publisherEmerald Group Publishing Ltd
dc.relation.ispartofJournal of Financial Regulation and Compliance
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanı
dc.rightsinfo:eu-repo/semantics/closedAccess
dc.snmzKA_WOS_20250529
dc.subjectBanking sector
dc.subjectIslamic banking
dc.subjectConsumer price index
dc.subjectBond interest rates
dc.subjectFourier Johansen cointegration test
dc.titleProfitability determinants in Turkish banking: comparing Islamic and conventional banks under inflation and bond rate effects
dc.typeArticle

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