The performance analysis of traditional banks and participation banks during the COVID-19 pandemic period in Turkey

Participation banks and traditional banks, which have been operating in Turkey for a long time and share the same competitive environment, form the basis of the financial system. Measuring the performance of the banking sector, which plays a key role in financing the real sector by converting savings into investment, is important for the economy as a whole. Particularly, performance analysis of participation banks, whose share is increasing in the Turkish banking sector, against their competitors is a necessity in terms of pioneering the economic policies to be implemented in the sector. In this sense, the study aims to measure the financial performances of participation banks and traditional banks, which have a large share in the banking sector, during the Covid-19 pandemic period between 2018 and 2023, using the Data Envelopment Analysis (DEA) method. DEA is a widely used, non-parametric efficiency analysis method based on the linear programming model. In the study, data from 13 traditional banks and 6 participation banks operating in Turkey were selected as input and output in the DEA method. The data were obtained from the independent audit reports of the relevant banks, activity reports and the official websites of the Banks Association of Turkey and the Participation Banks Association of Turkey. In the study, the R software program, which is becoming increasingly popular in statistical programming and data analysis, was used because there are very few studies in the literature. In the effectiveness analysis, the program ''EMS: Efficiency Measurement System User's Manual'' was primarily used. In efficiency measurement, input-oriented DEA was used under the assumptions of constant returns to scale and variable returns to scale. As a result of the study, it was concluded that a total of 6 banks, 1 participation bank and 5 traditional banks, were effective according to the input-oriented scale fixed return model, and a total of 10 banks, 3 participation banks and 7 traditional banks, were effective according to the input oriented scale variable return model.