Evaluation of Performances of Participation Banks: International Comparison with Topsis Method

Abstract

In this study, performances of a total of 18 participation banks operating in countries such as Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Jordan and Turkey between 2009 and 2015 were examined and the banks were attempted to be ranked accordingly. TOPSIS method, which is one of the multi-criteria decision making methods, allows alternative choices to be evaluated according to certain criteria and a ranking to be made. For this reason, the performance evaluation and ranking of the Participation Banks were carried out by using the TOPSIS method. In the scope of the study, ratios such as liquidity ratio, profitability ratio, activity ratio (efficiency ratio) and financial structure ratio are calculated by using the balance sheet and income tables of the examined participation banks and these calculated rates are used to calculate their performance scores. As a result of the TOPSIS method; the bank with the highest score received the first order. Given the performance scores achieved in this context, participation banks from countries such as Saudi Arabia and Qatar have been observed to perform better and rank higher. It is seen that participation banks from Turkey are placed in the middle order. Moreover, when the performance scores of participation banks in Turkey are examined separately, it is determined that Albaraka Turk participation bank generally performed better than others and had higher scores .