The Developments Following the COVID-۱۹ Outbreak From the Perspective of the Turkish Banking Sector

In the study, developments following the COVID-۱۹ outbreak are discussed in terms of the evolution of technology, competition, new rules in regulation, and responses to the risks posed by COVID-۱۹ and its impact on the financial services provided. The practices made towards these developments are explained in the context of ING, one of the multinational banks, and the banking sector in Türkiye. Non-performing loans (NPLs) as riskiness measurement and loans to assets ratio (LTA) as asset quality are examined based on bank types in the Turkish banking sector by comparing the pre-pandemic and pandemic periods. Three explanatory variables, namely, capital adequacy ratio, size, and liquidity ratio which are the most important bank-specific determinants of risk and asset quality, are included in the study. The results imply that banks are also affected by the pandemic with companies and individuals. Nevertheless, in the face of this extraordinary situation, supervising institutions and policymakers tried to reduce the effects of the crisis with special policies and regulations, and thus banking sector relatively preserved its pre-pandemic situation.

Keywords:

COVID-۱۹ outbreak , non-performing loans , loan-to-asset ratio , the Turkish banking system