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Estimating Deposit Banks Profitability with Artificial Neural Networks: A Software Model Design

Author

Listed:
  • Ferdi SONMEZ
  • Metin ZONTUL
  • Sahamet BULBUL

Abstract

In recent years, soft computing (SC) techniques have been preferred to measure bank profitability because of their successful applications in nonlinear multivariate situations. However, an adaptive system was needed due to the insufficient use of application software programs for SC. This paper is intended to measure profitability of deposit banks in Turkey with an adaptive SC software model of artificial neural networks which is developed for the first time and using variables that have impact on profitability. The results from the model indicate that all of the variables used have significant impact, in varying proportions, on profitability and that obtained estimations achieved the targeted and acceptable performance of success. This software model is expected to provide easiness on estimating bank profitability, since giving such successful estimations and not being affected by user differences.

Suggested Citation

  • Ferdi SONMEZ & Metin ZONTUL & Sahamet BULBUL, 2015. "Estimating Deposit Banks Profitability with Artificial Neural Networks: A Software Model Design," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 9(1), pages 9-46.
    • Handle: RePEc:bdd:journl:v:9:y:2015:i:1:p:9-46
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    More about this item

    Keywords

    Bank Profitability; Turkish Banking Sector; Soft Computing Techniques; Artificial Neural Networks; Multilayer Perceptron; Levenberg Marquardt Back Propagation Algorithm;
    All these keywords.

    JEL classification:

    • C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
    • C88 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other Computer Software
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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