Performance of Banks in Turkey

Abstract

The Turkish banking industry has experienced structural changes in recent years relevant to factors such as deregulation, liberalization, an extraordinary upgrading in information technology (IT), and feedback from the IMF as a reflection of the restructuring programme. In particular, changes and developments in the deregulation process, together with the privatization of various banks being merged or bought by foreign banks, have brought about a significant increase in competition, which has put pressure on Turkish banks to become more concerned with analysing and controlling their costs and revenues, and preserving high performance levels. Performance measurement has been a primary concern of investors, lenders, shareholders, and in particular to managers, in planning and controlling their activities. Therefore, examining the performance levels of Turkish banks can guide financial authorities to provide advice on possible actions that can be engaged in to maintain financial stability, minimize risk of failure and improve the performance of banks — all core issues on the road to EU membership.