Efficiency Analysis of Banks in Türkiye
Chapter from the book:
Sönmez,
A.
R.
(ed.)
2024.
Research on Money and Capital Markets.
Synopsis
Evaluating bank performances based on efficiency in the country's economy concerns not only bank owners and managers, but actually the whole society. A scientific study of the effectiveness of bank activities is extremely important for the state and citizens, as it concerns the country and national economy as well as bank owners and managers. Knowing which of the public or private banks in the banking sector are more efficient and which are less effective is vital for the right of every citizen to obtain information about financial markets, whether they are interested in the banking sector or not. The efficiency-based performance of commercial deposit money banks depends on their ability to achieve maximum output with minimum input. In the study, the capital, the deposits, number of branches, number of employees of deposit banks operating in Turkey were evaluated as "inputs", while market share, return on assets (ROA) and return on equity (ROE) were evaluated as "outputs". The aim of the study is to examine and compare the financial performances of 22 deposit banks operating in Turkey based on their activities in the 2021-2023 period with the input-oriented fixed returns based Data Envelopment Analysis (DEA) and Malmquist Total Factor Productivity Index (MTFPI) methods, and to create an efficiency-based performance ranking among the banks examined. Thus, by looking at the most up-to-date data, it is possible to shed light on all stakeholders interested in banking to make more objective decisions and make healthy evaluations in bank selection and various bank analyses.