COMPARATION OF FINANCIAL PERFORMANCE OF PARTICIPATION AND CONVENTIONAL BANKS IN THE TURKISH BANKING SYSTEM (2016:Q1-2020:Q2 PERIOD)

Abstract

Participation banks and conventional banks, which form the basis of the financial system, share the same competitive environment. Evaluating the performance of these banks is important in terms of creating resources for both the financial system and the economy. In this context, the main purpose of the study is to compare conventional banks that have an important share in the banking sector and participation banks that asset size, number of banks, number of branches etc. increasingly in the banking sector in terms of profitability, liquidity, capital adequacy, asset quality and balance sheet structure. In addition, in the study purposed to compare public participation banks with private participation banks and to compare participation banks separately. Quarterly data of 2016: Q1-2020: Q2 period is analyzed by Mann-Whitney U and Kruskal Wallis tests. As a result of the study while the capital adequacy in terms of equity total assets and profitability of conventional banks are higher than participation banks, the capital adequacy ratio, liquidity, balance sheet structure and asset quality of participation banks are higher than conventional banks. While the capital adequacy performance of public participation banks is better than private participation banks, the asset quality and liquidity power of private participation banks are better than public participation banks. In separate comparison of participation banks, the highest performance in terms of capital adequacy and liquidity belongs to Vakıf Participation Bank and the highest performance in terms of profitability, asset quality and balance sheet structure belongs to Kuveyt Türk Participation Bank