Performance Assessment of Deposit Banks with CAMELS Analysis using Fuzzy ANP-MOORA Approaches and an Application on Turkish Banking Sector

Abstract

Performance assessment in banking sector has been attached to investment decisions and efficiency analysis in the last decade. This study compares banking performance with using novel techniques in Turkey. The aim of this study is to assess the performance of Turkish deposit banks with the application of CAMELS analysis using Fuzzy ANP and MOORA approaches within the fuzzy environment. In this study, the novel hybrid model has been adopted to CAMELS analysis with related 17 different ratios for 23 deposits banks in Turkey. The major findings of this study are (i)“capital adequacy” is the most significant component of CAMELS approach, which contributes to banking stability and performance whereas “sensitivity to market risk” is the least important one among the other 4 major components, and (ii) when viewing the overall ranking, Bank 13 with the 13.1 percent of asset size in the sector is at the first rank for the CAMELS-based performance comparison, (iii) Bank 18with the 1.8 percent of asset size in the sector, has the lowest performance score, (iv) there is a positive relationship between asset size and banking performance in Turkey.