Did COVID-19 Affect the Profitability of Turkish Commercial Banks? Evidence from Panel Data

Abstract

The COVID-19 crisis started as a health emergency and soon caused major economic disruptions that affected the global economy and many business sectors worldwide. The banking sector felt the effects of fiscal and monetary policies that authorities put in place to stop businesses from closing and keep markets stable. Thus, this study tries to measure how the COVID-19 pandemic has an impact on the profits of 15 Turkish commercial banks, using COVID-19 as a dummy variable, and covering the period from 2015 to 2024. Based on the Hausman test result (P = 0.83) which is greater than 0.05, the random effects model was found better to be better fit for the analysis. The results of pooled OLS and random effects model were also included for comparison purposes. The analysis results revealed that there is no statistically significant impact of the COVID-19 pandemic on bank profitability, as the COVID-19 dummy remains insignificant, with p = 0.834 and p = 0.799 in the pooled OLS and random-effects models, respectively.

Keywords: COVID-19 pandemic, Bank profitability, Turkish commercial banks, Random effects model

DOI: 10.7176/RJFA/17-1-01

Publication date: January 30^th 2026