The impact of non-pricing strategies on the financial intermediary role of Turkish banks

Date
2010
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Özyıldırım, Süheyla
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Bilkent University
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English
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Abstract

This thesis aims to explore the effects of the availability of network branches on the intermediation performance of deposit banks in Turkey. Banks’ intermediation performance was measured by their ability to attract loans and deposits. The variations of non-pricing behavior among large scaled versus small scaled banks and public versus private banks were also analyzed. Panel generalized method of moment was used with quarterly panel data between the years 2003 and 2008. Empirical findings reveal that there exist a positive and significant relationship between all deposit banks’ intermediation performance and their branch network decisions. Results also confirmed that by having larger branch networks especially for large scaled, small scaled and private deposit banks significantly increase their deposits ans loans during the sample period. However, we couldn’t find any association between the financial intermediation performance and branch network size of the public banks. Overall, the findings suggest that branch network decisions play a critical role for deposit banks’ performance. Considering recent competition among banks in Turkey, we expect that branching strategies and other nonpricing strategies of the banks will matter more in the future.

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