Financial Performance Ranking of Turkish Participation Banks by Entropy and Mairca Method

Abstract

Participation banking, also referred to as Islamic banking, is also known as interest-free banking. The participation banking sector emerged in the 1980s. The participation banking sector is a complement to the Turkish banking sector. Therefore, measuring the performance analysis of this sector has become even more important. The difference from the traditional banking system is that it performs its banking transactions on the basis of the interest-free principle. The participation banking sector, which is a complementary element in the Turkish banking system, has developed rapidly with the support of the state. The purpose of this study is to measure and rank the financial performance of participation banks operating in the Turkish banking system for 2018-2019. Therefore, six participation banks in the Turkish banking sector are included in the analysis. In this study, Entropy and Mairca method were used jointly to measure the financial performance of participation banks. Six criteria have been determined for the use of participation banks in financial performance measurement. These criteria are determined as Total Assets, Total Loans and Receivables, Total Deposits, Total Equity, Number of Branches and Number of Employees. According to the results of the analysis, the best shows performing bank in 2018 is Ziraat Participation Bank. The second the best performing bank is Turkey Finans Participation Bank. The third best performing bank is Kuveyt Türk Participation bank.

Assesment of Financial Performances of Participation Banks by Entropy Based Gray Relational Analysis (Gra) Method

“…According to the GRA results based on entropy, between 2019-2021, Ziraat Participation and Vakıf Katılım showed the most successful performance, while Albaraka Türk showed the lowest performance. These results are compared with the literature, with the studies of Bektaş (2021) and Çelik (2020) for Ziraat Participation, and Gençtürk et al (2021), Odabaş and Bozdoğan (2020), Karavardar andÇilek (2020), andAyrçay et al (2017) is in line with the studies. Albaraka Türk's lowest performance was found in Yurttadur et al (2022), Bektaş (2021), Odabaş and Bozdoğan (2020), Karakaya (2020) and Gezen (2019) are in line with the studies.…”

“…These results are compared with the literature, with the studies of Bektaş (2021) and Çelik (2020) for Ziraat Participation, and Gençtürk et al (2021), Odabaş and Bozdoğan (2020), Karavardar andÇilek (2020), andAyrçay et al (2017) is in line with the studies. Albaraka Türk's lowest performance was found in Yurttadur et al (2022), Bektaş (2021), Odabaş and Bozdoğan (2020), Karakaya (2020) and Gezen (2019) are in line with the studies. In addition to these, according to the results of the analysis, it can be concluded that state participation banks performed better than private participation banks between the years 2019-2021.…”

“…K1 ve K5 kriterleri doğrudan oran olarak bankaların faaliyet raporları ve TKBB'den temin edilmiş, diğer kriterler ise kriterlerin hesaplanmasında kullanılan bilanço ve gelir tablosu kalemlerinin faaliyet raporlarından elde edilmesi ile yazarlar tarafından hesaplanmıştır. (Bektaş, 2021;Wu vd., 2011;Zhang vd., 2011). Yöntemin adımları ise şu şekildedir (Ecer, Fatih, 2020, ss.…”

“…Bu rakamlara bakıldığında Türkiye'deki katılım bankacılığının genel hacminin toplam sektördeki payının %8 ile %10 arasında değişmekte olduğunu söylenebilir. Bektaş (2021), Kartal (2020)…”