Efficiency Analysis of Foreign-Capital Banks in Turkey by OCRA and MOORA

Abstract

Banks, as financial institutions bridging investors and depositors, play important roles in the development of the national economy. Efficient operation of the banking sector is necessary not only for the strategic objectives of the banks but also investors, and the national economy itself. The national economy of a country is seriously affected by inefficiency of the banking system. Therefore, measurement of efficiency is an important issue and should continuously be carried out. In this study, the efficiency of 9 foreign-capital banks in Turkey between 2005 and 2014 is evaluated by the operational competitiveness rating (OCRA), multi-objective optimization by ratio analysis (MOORA) and simple additive weighting (SAW) method. The criteria weights were determined on a scale ranging from 1 to 9. All three methods revealed that Finansbank (FB) and Denizbank (DB) had the best performance, while HSBCB and INGB ranked after them.

Keywords: Bank Performance, Simple Additive Weighting, Multi-Objective Optimization by Ratio Analysis, Competitiveness Operational Rating, Foreign-Capital Banks.