PERFORMANCE MEASUREMENT OF PARTICIPATION BANKS IN TURKEY: AN APPLICATION BASED ON ANALYSIS OF CAMELS

The performance of banks operating in national and international markets affects both the local market and global markets. It is an important issue for banks to follow the policies implemented by banks that have an important place in financial markets, to analyze and control their financial situation by looking at the relevant financial ratios and to take timely measures against possible risks in financial markets. Banks' risks, financial status and performance must be determined to reflect objective and reality and economic units must be informed correctly and reliably about the financial structure of banks.Banks can evaluate their activities such as financial assessment, determination of risk factors and forecasting of profit loss conditions by considering performance measurements. The analysis of financial statements in banks is slightly different from the financial analysis of other enterprises. The most important reason for this is that bank balance sheet items are different from other business balance sheet items. Since the balance sheet items are different, banks should be analyzed with the help of different ratios. Developed and implemented in the USA, the CAMELS Rating System analyzes the performance of banks by analyzing the capital adequacy, asset quality management adequacy, profitability, liquidity and sensitivity to market risks. The aim of this study is to analyze the financial performance of the participation banks in Turkey through performance evaluation system of CAMELS. For this purpose, a comparative analysis was made with 21 financial ratios by using the data of 5 participation banks between the years 2016-2018. As a result of the analysis, the banks with the best financial performance were the banks with Vakıf, Kuveyt Turk and Ziraat participation banks respectively while the Turkey Finance and Albaraka Turk participation banks were the weakest performing banks.

Keywords

Participation Banks, Performance Measurement, CAMELS Analysis.