The analysis of efficiency and productivity deposit banks operating in Turkey: An application of DEA and Malmquist TFP

The banking sector, which is the locomotive of the Turkish financial system, plays a key role in the economy as a natural result of the growth trend and increasing profitability. Developments in financial markets have directly affected banking activities and transformed banks into institutions that mediate all kinds of financial transactions. Banks, whose main function is to bring together those who supply funds and those who request funds, have also increased the competition in the sector with the digitalization experienced in recent years. In this context, it has become important to measure, analyze and evaluate the performances of banks. This research has been prepared using up-to-date data. The period between 2017-2021 was chosen for the analysis. The data of 20 deposit banks were used in the research. Two constraints were determined in the selection of deposit banks used. These constraints are; It is possible to enter the top 20 banks in the order of the sector share from the highest to the lowest based on the asset size and to have at least two branches. Three different models were created in the selection of input and output variables. Input and output variables include production, intermediation and profitability approaches. Input-oriented CCR and BCC methods were applied to each model. In addition, the change in productivity between years was evaluated by calculating the Malmquist TFP change index all three models. According to the analysis findings, it has been determined that the state-owned and foreign-owned deposit banks are generally efficient or have scores close to efficiency. The conversion of deposits used in the analysis into loans has generally been successful. At the same time, the situation where the labor potential produces credit accounts is also successful. The realization of banking transactions through digital channels has reduced the labor potential. In addition, the reason for the increase in productivity is technological change. Different results can be obtained using different variables. The wider the data range, the better interpretation the pandemic's effects on the industry will be.