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| This study provides an in-depth analysis of the determinants of bank profitability in Türkiye using a dynamic panel dataset of 420 observations from 21 Turkish banks over the 2004–2023 period. The system generalized method of moments (GMM) is employed to address endogeneity, autocorrelation, and heteroscedasticity while capturing the persistence of financial performance. The empirical results statistically confirm a positive relationship between capital adequacy and return on assets (ROA). The foreign-currency asset ratio and the used-credit ratio are negative, whereas branch efficiency and inflation are positive and significant. The single effect of the policy interest rate is not statistically significant, while the interest–inflation interaction is negative and significant at the 10% level. Robustness and period-stability analyses indicate that the sign of the capital adequacy coefficient remains positive across specifications, but that the magnitude and statistical precision of the effect vary across sub-periods. The study emphasizes that capital buffers may support profitability, yet that policy implications should be drawn with period heterogeneity in mind, and that banks should prioritize operational efficiency to optimize long-term financial outcomes in a volatile economic environment. | ||||||||||||||||||
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