Impact of Financial Risks on Sustainable Growth and Profitability in Bist 100 Deposit Banks

This study examines the statistical associations between financial risk factors and both profitability and sustainable growth performance of seven deposit banks listed on Borsa Istanbul over the period 2014-2024. The theoretical framework is revised to avoid treating banks merely as passive intermediaries of pre-existing savings. Instead, the study recognizes deposit banks as credit-creating institutions whose lending activity, balance-sheet composition, capital position, liquidity structure, and risk exposure jointly shape sustainable performance. Employing a panel data framework, the analysis first tests for cross-sectional dependence and slope heterogeneity, followed by the assessment of stationarity using second-generation unit root tests. The empirical models are estimated through Panel Estimated Generalized Least Squares (EGLS) with Period Seemingly Unrelated Regressions (SUR) weighting, ensuring robustness against contemporaneous correlation and heteroskedasticity. The findings reveal that financial risk indicators are predominantly associated with a deterioration in bank performance metrics. Specifically, credit risk emerges as a critical determinant adversely affecting both internal growth and sustainable growth rates, whereas liquidity risk and capital adequacy risk exhibit stronger explanatory power for variations in return on assets. These results underscore the multidimensional nature of risk-performance dynamics in banking. Overall, the evidence suggests that sustainable bank performance is jointly constrained by multiple financial risk channels, and that relying on a single performance indicator may yield incomplete or potentially misleading assessments. The study contributes to the literature by providing a comprehensive, risk-integrated evaluation framework for bank performance while acknowledging that banking-sector sustainability also involves systemic risk, asset quality, market structure, and macro-financial resilience

Credit risk · Explanatory power · Liquidity risk · Market liquidity · Panel data · Profitability index · Sustainability · Sustainable Growth Rate · Banking stability, regulation, efficiency · Corporate Social Responsibility Reporting · Islamic Finance and Banking Studies

• Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors

  Open Access•Peter Pedroni•Oxford Bulletin of Economics and…•1999

  Incluir item

• Fully modified OLS for heterogeneous cointegrated panels

  Peter Pedroni•Nonstationary panels, panel…•2004

  Incluir item

• Testing environmental Kuznets curve hypothesis

  Open Access•Mehdi Ben Jebli, Slim Ben Youssef et al.•Ecological Indicators•2016

  Incluir item

• The IMPACTS of technological change on employment

  Open Access•Fatih Ayhan, Onuray Elal•Technological Forecasting and…•2023

  Incluir item

• Technology and jobs

  Open Access•Kerstin Hötte, Melline Somers et al.•Technological Forecasting and…•2023

  Incluir item

• Technical Change and the Aggregate Production Function

  Robert M Solow•The Review of Economics and…•1957

  Incluir item

• Innovation and employment in manufacturing and service firms in Ghana

  Open Access•Priscilla Twumasi Baffour, Festus Ebo Turkson et al.•Small Business Economics•2020

  Incluir item

• Endogenous Technological Change

  Paul M Romer, Paul Romer•Journal of Political Economy•1990

  Incluir item