THE EFFECT OF ASSET QUALITY ON BANK LENDING BEHAVIOUR

Banks are one of the most important institutes of financial system. banks execute an important function on real sector to solve its financial needs. there should be countries’ macro factors that affect bank funding along with corporations’ and banks’ micro factors. consequently, in our study, to express assets quality, we analyze the effects of nonperforming loans on giving or opening loan accounts on turkey’s deposit banks. total 13 deposit banks quarterly data gathered from the banks association of turkey between the dates of 2006-4q 2014-3q. as a result of implementing dynamic panel data analysis method, as expected, nonperforming loans / total loans and its one lagged values have significant and negative effect on loans / total assets variables. using as controlling variable noninterest income / total operations income and deposit / total liabilities variables, again as expected have significant and positive effect on loans.