The comparison of profitability performances of commercial banks and islamic banks using topsis method

In order for the economy of a country to develop in a healthy way, it is necessary that the banking sector should work effectively. What is meant by effectiveness is that banks must have a structure that is more profitable and that could take precautions to be influenced by the crisis at a minimum level.In this study; after what the concepts of Islamic banking and commercial banking are explained and the contents and details of these concepts are dealt with, the profitability performances of Turkish banking sector are compared and for this reason the profitability performances of eight banks in total including four Islamic and four commercial banks are measured. This measurement covers between the years 2003-2011. While this measurement is being done, firstly, data from the balance sheets and income statements of Islamic banks and commercial banks were collected. These data are necessary for the measurement of the ratios that will be used in this analysis. The ratios that are being used in this analysis are: return on assets, return on equity, equity / total assets, net interest revenue (net dividend) / total assets, pre-tax profit / total liabilities, non-accruing loans / total loans, total loans / total assets. After these ratios were found, performance scores are worked out by Topsis method and some results were reached. At the end of the analysis when all the years were studied, it was found out that the banks which have the highest performance scores are Bank Asya and Finansbank. The bank which has the lowest performance score is Bank Mellat. When all the banks have been studied; it has been found out that Islamic banks have reached higher performance scores and, as a result, are more profitable than commercial banks. Keywords: Commercial Banking, Islamic Banking, Topsis Method