Impact of sustainability performance on financial performance: A comparison between banks in BIST sustainability index and out of index banks

The study's aim is to evaluate the financial performances and sustainability performances of banks in the BIST Sustainability Index and out of index banks in Turkey between the years 2015-2020 and to research the relationship between these performances. In the research, financial and sustainability data of 18 banks were examined. Financial and sustainability data are compiled from the annual reports and sustainability reports published by the banks. Financial variables that used in the study are return on equity, return on assets, non-performing loans ratio, total assets and net profit. Sustainability variables are total sustainability performance, environmental sustainability performance and social sustainability performance. In the research, non-parametric tests are used because sustainability and financial data are not normally distrubited. The Mann-Whitney U test was used to compare the means of the two groups. Spearman Correlation Analysis was used to examine the relationship between the two variables. Analysis were performed by IBM SPSS Statics 21 and MS Excel programmes. The sustainability performance of banks in the BIST Sustainability Index and out of index banks in Turkey are calculated and evaluated. The Mann Whitney-U test is used to compare the sustainability performances of the two groups. As a result, it has been observed that banks in the BIST Sustainability Index show higher sustainability performance than out of index banks. Then, the financial performances of banks in the BIST Sustainability Index and out of index banks in Turkey are also evaluated with the Mann Whitney U test. The result is that it has been found the banks in the BIST Sustainability Index have more total assets and net profits than out of index banks. Finally, the relationship between the sustainability performance and financial performance of banks in the BIST Sustainability Index and out of index banks in Turkey has been examined. According to Spearman correlation analysis, no significant relationship was found between financial performance and sustainability performance. However, a positive and significant relationship was found between total assets, net profit, return on assets and sustainability performance. Keywords: financial performance, sustainability performance, BIST sustainability index, sustainability