Abstract:

The transformation of all collected deposits to loans is desired in banking system performing a bridge between sectors having surplus fund with sectors that need fund. The profit is generated through the positive difference between interest of loans and interest on deposits. Loan-to-Deposit (LTD) ratio, commonly used statistic for assessing a bank’s liquidity by dividing the banks total loans by its total deposits, is used for detection of potential risks and taking the necessary measures. If the LTD ratio is bigger than 1, banks might not have enough liquidity to cover any unforseen fund requirements. On the other hand, if the ratio is smaller than 1, banks may not be earning as much as they could be. In this study, annual LTD data (1993-2014) of Western and Eastern Blacksea Provinces were examined. In this scope, quality control charts, mainly used in manufacturing industry to detect out-of-control variability, were utilized. Besides, descriptive statistics and scatter diagrams were used. It was identified that LTD ratios of Blacksea provinces were not under statistical control. It was concluded that political instability and economic crises in mentioned period were responsible for this out-of-control variability.

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