Abstract
The aim of this study is to analyze the efficiency and productivity of 3 public, 6 private and 6 foreign deposit banks operating in the Turkish banking sector with the help of data envelopment analysis and Malmquist index.For this purpose, the efficiency of 15 deposit banks operating in the Turkish banking sector between 2014 and 2018 was measured and whether the efficiency of Malmquist productivity index changed over the years. In the study, input-oriented Charnes Cooper and Rhodes (CCR) model was used under the assumption of constant return to scale and 4 input 2 output variables were selected. Inputs in efficiency and productivity measurement are defined as; personnel expenses / total assets (%), total loans / total assets (%), equity / total assets (%), total deposits / total assets (%), outputs are defined as; the earning power of assets (net profit / total assets), the earning power of equity (net profit / equity) (%). The Windows Data Envelopment Analysis Program (Win4Deap) package program was used in the analysis and brokerage approach was adopted. While 4 banks were active under the Constant Return to Scale(CRS) assumption between 2014 and 2018, 8 banks were found active under the assumption of Variable Return to Scale (VRS).Inefficient banks; target values were calculated by slacks movement and radial movement values to their original values and it was found that the lambda values calculated by Win4Deap program and which banks are peers. The changes observed in Malmquist total factor productivity, technical efficiency, technological efficiency, pure efficiency, scale efficiency and total factor productivity were analyzed as a whole and decision-making units experienced improvement in the 2016-2017 period.
Highlights
Banks play a major role in the development of national economies; despite the fact that the banking sector is of great importance in the economic development, financial ratios are very significant for banks to evaluate their performance
The results show that Gulf Cooperation Council (GCC) Banks operate at an optimal scale, and the results suggest that, despite the increase in technical efficiency resources or management efficiency to 83.6% in 2011, there is an administrative inability to use resources
Under the assumption of constant return to the scale (CRS), the Charnes Cooper and Rhodes (CCR) model assumes that there is no significant relationship between enterprise scale and productivity and that it provides overall technical efficiency.The CRS assumption assumes that all decision-making units operate at the optimal scale
Summary
Banks play a major role in the development of national economies; despite the fact that the banking sector is of great importance in the economic development, financial ratios are very significant for banks to evaluate their performance. Productivity is defined as the ratio between the quantity of goods and services produced and the inputs used to produce those quantities of goods and services, and is generally formulated as output/input [43].Efficiency, in the economic literature,can be described as the capacity to achieve maximum results with minimum effort or cost, and in the organizational sense, it is defined as the most accurate way of doing things through an inputoutput mechanism [5].Another definition of efficiency. The study starts with literature review and data envelopment analysis models to be applied in the methodology section are explained. Analysis of the methods mentioned in the methodology was done by using the Win4Deap package program, the results of the program were included in the findings section and their comments were included as well. The comments on the results of analysis of 15 commercial banks operating in Turkey were discussed and the conclusions were reached
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