A research to compare the financial performances of participation banks operating in Turkey

The participation banking system, which operates within the framework of interest-free finance, continues to develop as an alternative banking model in Turkey. Operating in line with Islamic finance principles, these banks provide funds through methods such as profit-loss sharing and murabaha instead of interest, and adopt an ethical approach that is compatible with the real economy. The main purpose of this study is to comparatively analyze the financial performances of participation banks operating in Turkey and to reveal the performance differences between them. For this purpose, the financial data for the three-year period between 2021 and 2023 were evaluated using the TOPSIS method, one of the multi-criteria decision-making techniques. The analysis process was based on basic performance indicators obtained from the publicly available financial statements of the banks. According to the study findings, Kuveyt Türk (KT) stood out as the bank with the highest performance in all periods, while Vakıf Katılım (VK) ranked second every year. Kuveyt Turk remaining at the top for three consecutive years indicates that the bank has a sustainable and balanced performance. In line with the findings obtained, strategic recommendations for sector stakeholders have been presented.