The Relationship between CSR and Banks' Financial Performance: Evidence from Turkey

The aim of this paper is to analyze the bidirectional relationship between CSR practices of Turkish banks and their financial performance which is proxied by ROE, ROA and NIM for the year 2013. Content analysis is used to analyze the degree of CSR level based on a CSR index calculation and the link between performance and CSR level is investigated. The results show that ROA and ROE have no explanatory power in explaining CSR, whereas there is a bidirectional relationship between CSR and NIMs. The results point to an intuition that the banks are likely to charge the costs of CSR practices from their customers