Abstract:

(The Effects of Capital Structure Decisions on the Profitability of Deposit Banks in Turkey) The aim of this study is to determine the effects of capital structure decisions on bank profitability. Following this objective, four different regression models have been tested on Turkish deposit banks by panel data analysis. The deposit banks were separated into two groups as domestic and foreign banks in the analysis. According to the findings, the capital structures of domestic and foreign banks are statistically different and also the effects of capital structure variables on ROA, ROE, net interest margin and non-interest earnings are different in foreign and domestic banks. However, it is found that the capital ratio is positively related both by foreign and domestic banks' profitability ratio, which indicates that Agency Costs Hypothesis is not valid in the Turkish banking sector.

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