Comparing the efficency of banks: Performed in Turkey between 2004-2009

After 1980, economy of Turkey has started to open outward after the echonomic stability precautions package known as January 24 arbitraments. The banking sector has also grown up in parallel with a series of stability precautions, and started to open outward. In the date of December 31, 2010, it has been observed that 16 foreign capital banks had operations in Turkish banking sector. In this study, out of these 16 foreign capital banks only 5 foreign banks established in Turkey and 10 domestic private capital deposit banks have been researched. In the research, it was tried to ascertain the effects of foreign banks on Turkish banking sector by comparing the efficiency of domestic and foreign banks. In the study, between 2004 and 2009, foreign and domestic capital deposit banks efficiency, who shows activity in banking sector, was compared to input focused DEA under the hypothesis of changeable earnings according to the scale, and Malmquist total factor efficiency index. In the research of efficiency of banks 3 input (Total Deposits, Interest Expenses, Employee Expenses) and 2 output (Total Trusts, and Interest Earnings) variables were used. As a result of analysis, efficiency of foreign capital banks and private capital deposit banks founded in Turkey was introduced in detailed way. There are some politic suggestions to make inactive banks active. It was confirmed that foreign capital banks founded in Turkey are showing more active performance than private capital deposit banks, and the efficiency of private capital deposit banks are increasing with each passing year.Key words: Banking, Efficiency, Efficacy, Data Enveloped Analysis, Malmquist