This paper investigates the performance characteristics of Turkish private and state-owned commercial banks for the 1986- 1990 period. The link between interest margins and maturity structures of bank asset and liabilities is specified. Empirical evidence indicates that banks with longer positions experienced lower interest margins, a finding consistent with the presence of a downward sloping yield curve during most of this period. The results document that bank margins suffered after the financial reforms of 1988. Further, compared to private banks, state-owned banks exhibited lower interest margins and longer maturities, which is a direct consequence of portfolio constraints and management style of banks.