Sectoral Concentration in Loan Portfolio and Risk Relationship: An Analysis on The Turkish Commercial Banking Sector

Batu Tunay

Journal of BRSA Banking and Financial Markets, 2015, vol. 9, issue 1, 127-147

Abstract: In this study, the relationship between credit risk with concentration of sectoral credits lent by commercial banks operating in Turkey is analyzed. In the analysis of quarterly data within the period 2002:4-2014:2, private, public and foreign banks are taken into account in separate groups. The estimations that use linear panel data method, showed that sectoral concentration of credit risk is increasing. By time, the ratio of risky loans to total loans decreased in private and public banks, same ratio increased in foreign banks. However, it was determined to be positive and strong relationship between the concentration of credit risk for all bank groups.

Keywords: Credit Risk; Sectoral Concentration; Diversification; Panel Data (search for similar items in EconPapers)
JEL-codes: C23 G11 G21 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:bdd:journl:v:9:y:2015:i:1:p:127-147

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