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A Risk and Profitability Approach to Bank Performance Measurement: The Case of Turkish Commercial Banks

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  • M. Hasan Eken

Abstract

In this paper a risk-profitability approach is used to measure the performance of local and foreign commercial banks operating in Turkey over the period 1988- 2000. At the first step of the two-step analysis method used, an ordinary least square model is used to estimate the efficiency differences of banks; as using profitability ratios (net interest margin, return on asset and return on equity) dependent variables and their standard deviations as independent variables. Foreign banks seem to be more efficient than local banks. At the second step several correlates are examined. The correlates are expected to be different risk measures of banks.

Suggested Citation

  • M. Hasan Eken, 2005. "A Risk and Profitability Approach to Bank Performance Measurement: The Case of Turkish Commercial Banks," Istanbul Stock Exchange Review, Research and Business Development Department, Borsa Istanbul, vol. 8(29), pages 15-38.
    • Handle: RePEc:bor:iserev:v:8:y:2005:i:29:p:15-38
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    Keywords

    Banks; Risk; Efficiency.;
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