The role of oil prices, growth and inflation in bank profitability

ABSTRACT

The present study investigates the long-run equilibrium relationship between banking sector’s profitability and its internal and external determinants such as inflation, growth and oil prices in Turkey. The study adopts two separate models in order to differentiate the direct and indirect effects of oil price changes on bank profitability. Results of the study provide evidence that oil price changes significantly affect the Turkish banking sector’s profitability indirectly through the channels of inflation. Moreover, it is found that bank profitability is affected by oil prices directly and negatively because of the decreased oil-related business lending. The causality test results indicate that there are unidirectional relationships running from oil prices to inflation and from inflation to banking sector’s profitability. It is believed that findings of the study can be generalized for oil importing and developing countries in order to initiate precautions against oil price changes.

摘要

本研究调查了银行业盈利能力与土耳其通胀，增长和石油价格等内部和外部决定因素之间的长期均衡关系。本研究采用两种独立模型来区分油价变化对银行盈利能力的直接和间接影响。研究结果表明石油价格变化通过通货膨胀渠道间接显着影响土耳其银行业的盈利能力。此外，由于石油相关的商业贷款减少，银行的盈利能力受到石油价格的直接和负面影响。因果检验结果表明，从油价到通货膨胀，从通货膨胀到银行部门的盈利能力之间存在单向关系。相信该研究的结果可以推广到石油进口发展中国家，以便启动石油价格变化的防范措施。

KEYWORDS:

• Banking
• profitability
• oil prices
• causality

关键词:

• 银行业
• 盈利能力
• 石油价格
• 因果关系

Disclosure statement

No potential conflict of interest was reported by the authors.