Abstract:
In this study, I analyze the performance of the commercial banks in Turkey using the CAMEL approach and investigate the relationship between loan growth and soundness indicators such as asset quality, profitability and capital ratios of the banks by using econometric methods. I describe and document efficiency measures for the banking sector and find a more negative position in recent years. I observe an increasing behavior in loans to deposits ratio and explain the relation between the rising trend of the ratio and the efficiency measures. My findings are robust and significant which suggest that there is a relation between loan growth and efficiency of the sector.
