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Performance Analysis of Banks in Turkey Using CAMEL Approach

Author

Listed:
  • Dr. Mikail Altan

    (Selçuk University ?ktisadi ve ?dari Bilimler Fakültesi)

  • Habib Yusufazari

    (Selcuk University Institute of Social Sciences)

  • Aykut Bedük

    (Selçuk University ?ktisadi ve ?dari Bilimler Fakültesi)

Abstract

This study attempts to extensively investigate the performance and financial soundness of state-owned and private-owned banks in community of Turkish banks for the period 2005-12. We have chosen one of the most popular methods for measuring banking performance, the CAMEL approach, which is an acronym for the terms, Capital adequacy, Asset quality, Management quality, Earnings quality and Liquidity. This approach was initially adopted by the Federal Financial Institution Examination Council on November 13th, 1979; then adopted by the National Credit Union Administration in October 1987 in the U.S.A. After selecting the model, we have chosen three State-Owned banks and twelve Private-Owned banks from the Turkish banking sector, which represent more than seventy percent of the banking system in terms of total assets. For our purpose evaluating data for eight years, these data were analyzed by calculating 23 ratios related to CAMEL Model. The results indicated that on the overall performance, in the CAMEL rating model Ziraat Bank was in top position followed by Ak Bank and Vakif Bank. Tekstil Bank had the lowest rank in most positions. It was also observed that there is a significant difference between performance of state-owned and private-owned in Turkish banking system.

Suggested Citation

  • Dr. Mikail Altan & Habib Yusufazari & Aykut Bedük, 2014. "Performance Analysis of Banks in Turkey Using CAMEL Approach," Proceedings of International Academic Conferences 0902916, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:0902916
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    References listed on IDEAS

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    1. Rebel Cole & Jeffery Gunther, 1998. "Predicting Bank Failures: A Comparison of On- and Off-Site Monitoring Systems," Journal of Financial Services Research, Springer;Western Finance Association, vol. 13(2), pages 103-117, April.
    2. Beverly Hirtle & Jose A. Lopez, 1999. "Supervisory information and the frequency of bank examinations," Economic Policy Review, Federal Reserve Bank of New York, vol. 5(Apr), pages 1-20.
    3. Ali Osman GURBUZ & Serhat YANIK & Yusuf AYTURK, 2013. "Income Diversification and Bank Performance: Evidence From Turkish Banking Sector," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 7(1), pages 9-29.
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    Cited by:

    1. Md. Zahidur Rahman & Md. Shohidul Islam, 2018. "Use of CAMEL Rating Framework: A Comparative Performance Evaluation of Selected Bangladeshi Private Commercial Banks," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(1), pages 120-128, January.
    2. Ledhem, Mohammed Ayoub & Mekidiche, Mohammed, 2020. "Economic growth and financial performance of Islamic banks: a CAMELS approach," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 28, pages 47-62.
    3. Babatunde Rahman YUSUF & Jamiu Olakunle TIJANI, 2019. "An Evaluation of Financial Health of Nigerian Deposit Money Banks using CAMELS Rating Model," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 48-61.
    4. Iqbal Thonse Hawaldar & Lokesha & K. Abhaya Kumar & Prakash Pinto & Sheila M. Sison, 2017. "Performance Analysis of Commercial Banks in the Kingdom of Bahrain (2001-2015)," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 729-737.

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    More about this item

    Keywords

    Banking; CAMEL Approach; Performance Analysis;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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