Analysis of the Relationship between Profitability and Foreign Exchange Positions, Asset Quality, and Loan Growth in the Banking Sector

Purpose: This study aims to investigate the relationship between banking profitability indicators and foreign exchange positions, asset quality, loan growth of banks using data for Turkey 2007: Q2 – 2020: Q3. Design/Methodology: In study, models with two dependent variables seven independent were established. The ARDL method Toda-Yamamoto causality test conducted on models. Findings: It was detected that a negative existed their positions as well quality in long-run, however, positive profitability. Similar results emerged long-term short-run. According result, it concluded bilateral causal non-performing loans/capital ratio, but there unilateral currency loans/total loans, sectoral distribution loans total loans/GDP variables. Limitations: limitations involve fact based are obtained from IMF’s official website begins at 2007:Q2, claiming time constraint can be said is country limitation, since utilized merely Turkey. Originality/Value: absence studies modelling internal such banks’ qualities explanatory observed. thought pertinent analysis part may contribute literature none them have been considered same model previous studies.