Operational risk analysis with basic indicator approach in Turkish banking sector

Associated with the Basel Capital Accords, it has become important to calculate the operational risk for the banks and to calculate the legal capital requirement for the exposures. Effective operational risk management contributes to strengthening the financial structure of banks, increasing the competitiveness, preventing the risks arising from the system, process and human. In this study, operational risk analysis was performed according to the basic indicator approach by using the data between the years 2010-2018 of the top ten banks in terms of asset size operating in the Turkish banking sector. 3 of these banks are state-owned banks (T.C. Ziraat Bankası A.Ş., Türkiye Halk Bankası A.Ş., Türkiye Vakıflar Bankası T.A.O.), 3 of them are foreign banks (Türkiye Garanti Bankası A.Ş., Denizbank A.Ş., QNB Finansbank A.Ş.) and 4 of them are private banks (Akbank T.A.Ş., Türk Ekonomi Bankası A.Ş., Türkiye İş Bankası A.Ş., Yapı ve Kredi Bankası A.Ş.). As a result, according to the basic indicator approach between the years 2012-2018, predominantly the banks with the highest amount based on operational risk have been assigned to Turkey İş Bankası A.Ş., T.C. Ziraat Bankası A.Ş. and Türkiye Garanti Bankası A.Ş. on the other hand, the banks with the lowest amount based on operational risk have been identified as Türk Ekonomi Bankası A.Ş. and Denizbank A.Ş.. Keywords: Banking, Operational Risk, Basic Indicator Approach.