Abstract
In the last decade, Performance assessment of banking sectors in advanced economies became a prominent issue investment decision. This paper aims to evaluate the balanced-scorecard-based performance of the Turkish banking sector using the Analytic Network Process Approach. Within this scope, all 33 deposit banks were intended to analyze out of 34 banks. Within this scope, we made an analysis in order to determine which perspectives of the balanced scorecard approach are appropriate for each type of bank (state banks, private banks, foreign banks). In this study, we used Analytic Network Process (ANP) approaches so as to achieve this objective. With a balanced-scorecard performance assessment of the banking sector using the ANP approach, all the factor priorities have been extracted and normalized to one for each cluster and final priorities have been obtained. The final priorities and rankings of each perspective of the balanced scorecard and the type of bank ownership have been assessed in the model. According to the results of the analysis, Findings demonstrate that (i) financial factor of balanced scorecard approach has the first rank with 65.7 percent; (ii) Customer perceptive is in the second rank with 22.1 percent. (iii)Third and fourth ranks have close results, (iv) learning and growth stay in the third rank with 6.3 percent (v) internal factor has the weakest importance with 5.9%, (vi) state banks into bank ownership have the highest rank with 53.9 percent, (vii) Private owned banks are the second in the relative performance of the bank groups with 36.1%, (viii) Balanced scorecard based performance of foreign banks are replaced in the last order with approximately 10%.
Highlights
Banks play a critical role in financial sectors all around the world
It will be better to analyze the importance of the type of the banks in this sector. As it can be understood from the table above, deposit banks play the most significant role in Turkish banking sector. 91% of total assets and total loans belong to deposit banks
Because the performance measurement aspect is very complex for the banks, we decided to use analytical network process (ANP) approach so as to achieve better results
Summary
Banks play a critical role in financial sectors all around the world. Most of the companies increase their investments with the loans taken from the banks. One of the most popular ratios is return on assets (ROA) that shows the net profit amount per total asset Similar to this ratio, return on equity (ROE), net interest margin (NIM), return on investments (ROI) are other significant ratios used in evaluation of the performance of the banks. Most of Dincer et al, International Journal of Decision Sciences & Applications (2528-956X) 1(1) (2020), 01-12 the approaches related to performance measurement are considered different financial ratios.On the other hand, balanced scorecard approach became popular for performance evaluation in recent years. The main difference of this approach from others is that it considers non-financial ratios in addition to financial ratios Because of this situation, it is accepted that balanced scorecard approach provides more realistic results in comparison with other techniques. Another advantage of this approach is that it increases communication between employees in different departments
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Decision Sciences & Applications (2528-956X)
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
