Turkish banking sector 2009-2016 period performance analysis with CAMELS rating system

Banking system has a key importance and place in financial system. Banks are financial institutions which bring together those with funding need and those having surplus funds. Along with functions like transferring funds, creating money in the form of deposits, and supporting economic and fiscal policies, banks also contribute directly to the employment in the country. That banking systems operate properly is of particular concern to all in the economic system since possible risks in the banking sector have direct effects on economy. Therefore, proper operation of banking sector concerns individuals, institutions and governments. In accordance with globalization and technological advancements, banking system may be exposed to serious risks. Various methods are developed by the audit authorities in order to avoid and minimize these risks. The CAMELS rating system developed by the supervisory authorities in USA analyzes the risk based audits and performances with a remote surveillance and inspection system. This study aims to analyze the 8 year-period (between 2009 and 2016) performance of 11 deposit banks operating in Turkish banking sector and registered in BIST using the CAMELS rating system. The analyses in the study were evaluated on the basis of groups and banks. According to the results of the analysis, public deposit banks is the bank group with the best performance in terms of capital adequacy, quality of management, profitability and the sensitivity component to market risk; private deposit banks in terms of active quality component; foreign deposit banks in terms of liquidity component. According to the results on the basis of banks, Akbank has the highest performance rate and ICBC Turkey Bank has the lowest performance rate. Key Words: Banking, Deposit Banks, Performance Analysis, CAMELS Rating System