SUMMARY: Banks are financial intermediaries that rely on capital to generate liquidity and credit. The objective of banks, like other financial institutions, is to have a capital structure that minimizes the cost of capital and maximizes the market value of the institution. The determinants of the capital structure of banks have a significant impact on the decisions to be undertaken. Banks are expected to hold more than the minimum capital requirements. The reason for this is to prevent banks from facing various risks that may affect their operations, such as bankruptcy. This study aims to determine the factors affecting the capital structure of commercial banks operating in the Turkish banking sector. In the study, banking sector data for the period 2016-2021 were analyzed. In the study, correlation analysis was employed to examine the relationship between capital adequacy ratio (CAR) and micro-macro indicators and regression analysis was utilized to examine the relationships at multiple levels. Capital adequacy ratio is considered as the dependent variable representing the financial stability of commercial banks. Our independent variables; return on assets, liquidity risk, size, non-performing loans, which are considered to affect capital structure and accepted in the literature, are accepted as micro factors, while economic growth, inflation, exchange rate and interest rate are accepted as macro factors. With this study, the relationship between macro and micro economic parameters affecting the capital adequacy ratio has been identified.

KEY WORDS: Capital Structure, Turkish Banking Sector, Regression Analysis, Commercial Banks

GEL CODE: C23, G21, G32