The Effect of Loan Portfolio Concentration Level on Financial Stability and Performance: A Comparatıve Analysis in Dual Banking System
In this study, the effect of loan portfolio concentration on financial stability and performance was investigated in both conventional and Islamic banking systems. In the study examining the period of 2005-January and 2021-December, the long and short-term effects of credit portfolio concentration o...
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| Language: | English |
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Istanbul University Press
2022-07-01
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| Series: | İktisat Politikası Araştırmaları Dergisi |
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| Online Access: | https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/02ACB6D4E409402EB2B93E8CEB43B8BD |
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| _version_ | 1850189304798642176 |
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| author | Oğuzhan Ece Bülent Diclehan Çadırcı |
| author_facet | Oğuzhan Ece Bülent Diclehan Çadırcı |
| author_sort | Oğuzhan Ece |
| collection | DOAJ |
| description | In this study, the effect of loan portfolio concentration on financial stability and performance was investigated in both conventional and Islamic banking systems. In the study examining the period of 2005-January and 2021-December, the long and short-term effects of credit portfolio concentration on financial stability and performance in the bilateral banking system were analyzed by cointegration tests. According to theempirical results, in which ARDL method for the conventional banking system and fully modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS) and canonical cointegrating regression (CCR) methods for the Islamic banking system were used, it has been found that the diversification of the loan portfolio reduces the bankruptcy risk in the conventional banking system in the long run and it has both positive and negative lagged effects in the short run. In the Islamic banking system, while there is no relationship between this diversification and financial stability in the long run, it has been concluded that it increases the risk of bankruptcy in the short run. When evaluated in terms of banking performance, it is seen that loan portfolio diversification does not cause a serious effect in the long or short term and does not cause differentiation within the bilateral banking system. |
| format | Article |
| id | doaj-art-2f8a024d852f4c25bda9983e2af9f851 |
| institution | OA Journals |
| issn | 2148-3876 |
| language | English |
| publishDate | 2022-07-01 |
| publisher | Istanbul University Press |
| record_format | Article |
| series | İktisat Politikası Araştırmaları Dergisi |
| spelling | doaj-art-2f8a024d852f4c25bda9983e2af9f8512025-08-20T02:15:38ZengIstanbul University Pressİktisat Politikası Araştırmaları Dergisi2148-38762022-07-019252355610.26650/JEPR1117478123456The Effect of Loan Portfolio Concentration Level on Financial Stability and Performance: A Comparatıve Analysis in Dual Banking SystemOğuzhan Ece0https://orcid.org/0000-0003-2443-9678Bülent Diclehan Çadırcı1https://orcid.org/0000-0003-3007-6068Erzincan Binali Yıldırım Üniversitesi, Erzincan, TurkiyeErzincan Binali Yıldırım Üniversitesi, Erzincan, TurkiyeIn this study, the effect of loan portfolio concentration on financial stability and performance was investigated in both conventional and Islamic banking systems. In the study examining the period of 2005-January and 2021-December, the long and short-term effects of credit portfolio concentration on financial stability and performance in the bilateral banking system were analyzed by cointegration tests. According to theempirical results, in which ARDL method for the conventional banking system and fully modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS) and canonical cointegrating regression (CCR) methods for the Islamic banking system were used, it has been found that the diversification of the loan portfolio reduces the bankruptcy risk in the conventional banking system in the long run and it has both positive and negative lagged effects in the short run. In the Islamic banking system, while there is no relationship between this diversification and financial stability in the long run, it has been concluded that it increases the risk of bankruptcy in the short run. When evaluated in terms of banking performance, it is seen that loan portfolio diversification does not cause a serious effect in the long or short term and does not cause differentiation within the bilateral banking system.https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/02ACB6D4E409402EB2B93E8CEB43B8BDcredit riskloan portfolio concentration levelfinancial performancefinancial stabilityardl boundary test |
| spellingShingle | Oğuzhan Ece Bülent Diclehan Çadırcı The Effect of Loan Portfolio Concentration Level on Financial Stability and Performance: A Comparatıve Analysis in Dual Banking System İktisat Politikası Araştırmaları Dergisi credit risk loan portfolio concentration level financial performance financial stability ardl boundary test |
| title | The Effect of Loan Portfolio Concentration Level on Financial Stability and Performance: A Comparatıve Analysis in Dual Banking System |
| title_full | The Effect of Loan Portfolio Concentration Level on Financial Stability and Performance: A Comparatıve Analysis in Dual Banking System |
| title_fullStr | The Effect of Loan Portfolio Concentration Level on Financial Stability and Performance: A Comparatıve Analysis in Dual Banking System |
| title_full_unstemmed | The Effect of Loan Portfolio Concentration Level on Financial Stability and Performance: A Comparatıve Analysis in Dual Banking System |
| title_short | The Effect of Loan Portfolio Concentration Level on Financial Stability and Performance: A Comparatıve Analysis in Dual Banking System |
| title_sort | effect of loan portfolio concentration level on financial stability and performance a comparative analysis in dual banking system |
| topic | credit risk loan portfolio concentration level financial performance financial stability ardl boundary test |
| url | https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/02ACB6D4E409402EB2B93E8CEB43B8BD |
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