Ranking of Turkish Banks According to Capital Adequacy and Profitability Ratios with the VIKOR Method

Abstract

The banking sector plays an important intermediary role in the economy; therefore, the stability and profitability of the sector is critical for the health of the whole economy. The relative position of each bank in the sector could be measured with alternative methods, such as ranking the banks according to the size of their assets, or the value of total deposits and/or credits in the sector. Another approach is to measure financial performance by ranking the banks according to various predetermined criteria. The aim of this study is to rank the largest 15 commercial banks in Turkey for the period of 2002-2012 according to their financial performance measured with capital adequacy and profitability ratios using the VIKOR method. It is determined that Akbank, one of the biggest private banks of Turkey, is the top performer in our list. Alternatifbank, on the other hand, a foreign private bank, is ranked 15^th on our list. Three big public banks are listed as 4^th, 6^th, and 10^th and therefore their performance could be labeled as above average.