Evaluation of participation bank's financial performance using TOPSİS and PROMETHEE : An i̇nternational application

With an establishment less than half a century, despite all the challenges and obstacles that they have faced, nowadays the role of participation banks in the banking sector is becoming more and more important and their share in the world' financial markets is increasing too. Today participation banks are located not only in Muslim countries but also in most developed economies like Great Britain, Germany, some other European countries and USA. In this study, referring to the existing literature after being explained the concept of participation banking, it is measured the performance of 21 different participation banks that are chosen throughout the world. The period in study includes the years between 2009 to 2013. The data of the empirical study are obtained from balance sheet and income statements of each bank and then the required financial ratios are calculated. The ratios included in the analysis are liquidity, profitability, activitiy (efficiency) and debt ratios. After having calculated these financial ratios, the weighted averages are assigned through AHP method. Then using TOPSIS and Promethee, two multi-criteria decision making methods, the scores are calculated and the ranking of the banks performance is done accordingly. The banks that have scored the highest are ranked on the top, whereas the banks that have scored lower are ranked on the bottom of the list. Key words: Participation banking, Topsis Method, Promethee Method