Applying a two-stage TOPSIS approach and stepwise regression in evaluating bank performance: evidence from Turkish banks

The purpose of this study is to evaluate the performance of banks in Indonesia. Specifically, this study has examined the static effect of ownership structure on bank performance in Indonesia over the period 1995–2006. The sample consists of 74 banks, namely 56 private banks, 15 community development banks (BPD), and three federal banks from 1995 to 2006. The data was analyzed using least-squares regression method, the general least squares method, and the method of random effects. The findings of this study show that the BPD performed better compared to private banks. This indicates that BPDs have better performance rather than private banks which is due to the fact that customers can be able to pay loans, they have special knowledge on that area and the performance of BPD is supervised by local government. In addition, the amount of equity, economic growth, financial crisis, and the financial ratios affect the performance of the bank. However, bank status has no effect on bank performance.

Oil export is the major source of revenue for the countries in the Middle East. Their economies are sensitive to fluctuations in oil prices. The present study examines the impact of oil crisis on the performance of selected banks of Kingdom of Bahrain using profitability, efficiency, capital adequacy and liquidity ratios in the pre-crisis and crisis periods. The study reveals that there is no significant difference in the performance of banks in the pre-crisis and crisis period. The results indicate that there is a significant difference in the performance of conventional banks and Islamic banks in the pre-crisis period. However, there is no significant difference in the performance of conventional banks and Islamic banks during the crisis period.

The technological developments in the banking sector have significant implications for banks and are dramatically changing the way retail banks conduct their business. Banks can invest in digital banking (DB) services either to acquire a strategic advantage or because doing so has become a strategic necessity. This study is organized to examine if DB service channels have any positive or negative impact on Turkish deposit banks’ performance. With this aim in mind, in the first stage of the proposed DEA model, physical assets are used. Then, in the second stage, DB service channels are added to see if they have any impact on banks’ performance. The results show that the banks are investing in DB services just to keep the competition as it is. In other words, they invest in DB services as a strategic necessity. DB services do not provide any strategic advantage to any banks in terms of financial performance or efficiency since the banks are already efficient. Investing in DB only helped to preserve their strategic positions. The Turkish deposit banking industry is very competitive and very profitable, and it is necessary to invest in DB services just to keep the competition as it is.