Brokerage Firms: Tigers and Underdogs

Abstract

This paper explores the brokerage firms in Turkey in terms of the impact of their origins on their having assets and profits. Considering the report released by ACMIIT, we cascade the brokerage firms as the bank-origin ones and the non bank-origin ones, and examine them in a comparative fashion. Two concomitant analyses are conducted. The findings of the first examination show that the average values of the asset totals, net real operating profits and net profit after tax items of the bank-origin brokerage firms are statistically higher than those of the non-bank-origin brokerage firms. The findings of the second examination show that the relationship between assets and corporate profits is significant and robust along with both the brokerage firm types. However, we find that assets play a much more decisive role in determining corporate profits, should the given brokerage firm have a bank-origin. In other words, the bank-origin brokerage firms gain higher profit volumes, because their asset totals are considerably larger than those of their peers. These lead us to concur with the ACMIIT's opinion, and contend that banks' origins are influential in their asset totals and profit realizations. © EuroJournals Publishing, Inc. 2010.