Efficiency Analysis of Turkish Banking Sector using Data Envelopment Analysis during the 2008 Global Financial Crisis

In this study the efficiency of the deposit banks operating in Turkey is investigated in the period of financial crises and excess money supply between 2008-2013. The 2008-2013 period has an advantage for the banks to achieve low cost resources due to the expansionary policies of the central banks. In general between 2008-2013 years, as a result of monetary policies and expansionary policies, the widening of liquidity in developing countries like Turkey have some effects like acquiring low cost resources and the effects of increased employment and GNP on the inputs and outputs of banking activities. From this point of view analyzing the efficiency of commercial banks operating between 2008-2013 is important. Analyzing the efficiency of banks using Data Envelopment Analysis (DEA) has started at the beginning of 1980’s. The first examples of efficiency analysis studies were seen in developed countries like United States of America and England. After these studies, for the efficiency analysis of the banking sector in other countries, Data Envelopment Analysis is extensively used. With the Data Envelopment Analysis, after interrelating many inputs and outputs, some comments can be derived about efficiency. Banks have to use human capital and technology efficiently in order to be efficient and to decrease operating costs. Measuring the efficiency of banks help the banks to focus on competitiveness and profitability. It also provides the opportunity to compare with the bank or banks which perform best practices. For this purpose 26 deposit banks which operate continuously between the years 2008-2013 in Turkey was assessed using Data Envelopment Analysis (DEA). In the solution phase of the models, DEA Solver (Data Envelopment Analysis Solver) program was used. According to the findings, it was observed that the year 2011 has the highest total efficiency of the Turkish banking sector. In this year, foreign owned banks have reached the highest efficiency scores. On the other hand, year 2009 was the most efficient year for both the state owned commercial banks and privately owned commercial banks. Year 2012 is the one in which total efficiency is lowest. In 2012, the state owned deposit banks are not efficient, foreign owned deposit banks have lowest efficiencies.