The banking sector, which used to be much less interesting, has become a popular research area with the crisis in 2008. The devastating effect experienced with the financial crisis was not limited to one country and affected the entire world economy. Non-performing loans increased as financial institutions lowered their lending standards. The increase in non-performing loans caused firm bankruptcies and liquidity problems in banks. Maximizing the wealth of shareholders is the primary duty of financial institutions. In performing this duty, financial institutions take various risks. Risks taken in the banking sector directly affect the economy. Thus, the risks to be taken are not only the problems of the shareholders, but also the problem of the entire economy. Due to the structure of the economy, small-scale enterprises use the loans provided by banks in the TRNC. Although TRNC banks use risks management strategies, an increase is observed in non-performing loans. In the study, the factors determining the profitability of 17 banks serving in the TRNC were investigated by panel data analysis method. According to the findings of the study, non-performing loans negatively affect the profitability of banks in the TRNC. In addition, it has been observed that the size of the bank has a positive effect on profitability. Large banks in the TRNC can use their advantages arising from economies of scale and earn more profits.