İnterest free banks performance analysis

The main aim of this thesis is to examine the performances of interest free banks and commercial banks, determine the differences between their performances and try to confirm the reasons behind these differences with the help of CAMELS analysis. In this way, various evaluations can be carried out about both current and future positions of interest free banking which is one of the most crucial elements of interest free finance. In the first part of the thesis, substantial information about the concept of interest free banking and the history of these banks is provided, main features of interest free banks are mentioned, and their methods of applying and raising funds and how these methods differ from commercial banks? are handled in detail. The notion of performance in this context is explained thoroughly afterwards. The concepts related to performance analysis and the approaches of performance analysis are investigated. Adequate information regarding CAMELS analysis is given, the components of CAMELS analysis are categorized, and the proportions used in each component are indicated.In the second part of thesis, the studies carried out on the performances of Islamic banks around the world and the interest free banks in Turkey are examined and crucial information about these studies is presented.In the third part of the thesis, the average performances of interest free banks and commercial banks that carry on their business in Turkey, have completely different working principles but fulfil similar requirements in the same economy and work on the same law between 2006 and 2011 are compared by CAMELS analysis. The reason why the period after 2006 is 99taken as a base is the radical changes in the regulation of interest free banks as of that time. 28-proportion is used in the analysis.In the conclusion part, the information obtained after the analysis results is shared. These results show that the sensitivity of interest free banks to the market risks is higher than the commercial banks? and interest free banks are less affected during crisis periods than commercial banks. This situation can be attributed to the fact that these two types of banks have different working principles. However, it is seen that interests free banks can?t keep up with commercial banks in terms of liquidity and quality of management. Interest free banks, which are about 4 % of commercial banks in magnitude, experience some troubles in the liquidity asset components.Key Words1. Participation Banks2. İnterest-free Banking3. İslamic Banks4. Performance Analysis5. Camels Analysis