Performance measurement at commercial banks: A survey based on CAMELS analysis

Performance and profitability measurement of banking sector which is the most important part of financial system of a country has become more important compared to past with the economical developments experienced in recent years. To be able to create competitive advantage with this performance measurement, the banks take the advantage of making estimation of general situation, analyzing risk potentials and measuring the contributions of decisions to be taken to profitability, performance and effectiveness. The aim of this study is to make performance analysis based on CAMELS analysis in Turkish banking sector.Basic concepts have been given place in the first part of the study and the subjects of performance measurement and evaluation have been mentioned. After the factors which affect the performance of the banks have been examined, the information concerning performance measurement methods has been given. In the second part, the structure of Turkish banking system and its basic features have been examined and the effects of financial crisis on the sector have been emphasized. In the third part, performance measurement of commercial banks which are active in Turkish banking sector has been made with CAMELS Analysis, a method frequently used in the measurement of banking performance. Financial ratios of 13 banks in the sector and on the basis of their reference values have been examined.Key Words: Banking, Performance, Performance Measurement, CAMELS Analysis