The Financial Performance of Conventional and Islamic Banks in Terms of Profitability & Liquidity: a Case of Turkey
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Date
2020
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Kadir Has Üniversitesi
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Abstract
1980'lerden bu yana, Türk bankacılık sektörü, Orta Doğu ve Kuzey Afrika bölgesinden sermaye girişlerinde önemli bir oyuncu olmuştur. İslami bankalar, geleneksel bankalarla birlikte faaliyet göstermektedir. Türkiye'de İslami finans sistemi 1984 yılında başlamıştır. İslami finansın ilk ticari markası Özel Finans Kurumları olmuştur ve bunun için 2005 yılında yeni bankacılık lasları ile Katılım bankalarına dönüşmüştür. 2001'den sonra, Türk bankacılık sektörü köklü bir yeniden yapılanma sürecinden geçmiştir ve hükümet, sonunda sektörün birçok yabancı yatırımcıya açılmasını sağlayan iyileşmiş programları benimsemiştir. Bu çalışmanın amacı, Türkiye'deki İslami bankaların ve konvansiyonel bankaların finansal performanslarını karşılaştırmak ve aynı zamanda 2008 küresel finansal krizinde farklı davranıp davranmadıklarını incelemektir. Çalışma, İslami bankacılık literatürüne katkı sağlamayı amaçlamaktadır. Tezin kullandığı metodoloji, CAMELS yaklaşımı içindeki değişkenleri kullanarak bankaların karlılığını ve likiditesini test etmeyi ve araştırma hipotezlerini test etmek için panel verilerini kullanmayı içerir. Sonuçlar, iki tür bankanın performansı açısından bir fark olmadığını göstermektedir. Bununla birlikte, riske göre ayarlanmış getiriler, İslami bankalar için olumsuz bir performans ölçüsü olduğunu göstermektedir. Regresyon sonuçlarına göre çalışmada, kriz sırasında ortaya çıkan İslami ve konvansiyonel bankaların farklı davranmadığı ve aralarında önemsiz bir fark olduğu bildirildi.
Since the 1980s, the Turkish banking sector has been a pivotal player for capital inflows from the Middle East and North Africa region. Islamic banks operate alongside conventional banks. Islamic financial system started in Turkey in 1984. The first trademark for Islamic finance was Special Finance Houses for which later changed into Participation banks by new banking las in 2005 enacted the government. After 2001, the Turkish banking sector has been through in profound restructuring and the government has been adopting convalesced programs which at end enabled the sector to open up many foreign investors. The objective of this study is to compare the financial performance of Islamic banks and conventional banks in Turkey and also examine whether they behaved differently during the global financial crisis of 2008. The study aims to contribute to the literature on Islamic banking. The methodology employed by thesis includes testing profitability and liquidity of banks using variables within the CAMELS approach and use panel data to test the research hypotheses. The results suggest there is no difference with respect to the performance of the two types of banks. However, risk-adjusted returns suggest a negative performance measure for Islamic banks. Based on the regression results, the study finds during the crisis Islamic and conventional banks did not behave differently and insignificant difference among them was reported.
Since the 1980s, the Turkish banking sector has been a pivotal player for capital inflows from the Middle East and North Africa region. Islamic banks operate alongside conventional banks. Islamic financial system started in Turkey in 1984. The first trademark for Islamic finance was Special Finance Houses for which later changed into Participation banks by new banking las in 2005 enacted the government. After 2001, the Turkish banking sector has been through in profound restructuring and the government has been adopting convalesced programs which at end enabled the sector to open up many foreign investors. The objective of this study is to compare the financial performance of Islamic banks and conventional banks in Turkey and also examine whether they behaved differently during the global financial crisis of 2008. The study aims to contribute to the literature on Islamic banking. The methodology employed by thesis includes testing profitability and liquidity of banks using variables within the CAMELS approach and use panel data to test the research hypotheses. The results suggest there is no difference with respect to the performance of the two types of banks. However, risk-adjusted returns suggest a negative performance measure for Islamic banks. Based on the regression results, the study finds during the crisis Islamic and conventional banks did not behave differently and insignificant difference among them was reported.