Performance evaluation of bank branches in Turkey using the TOPSIS method

Abstract

A new trend in the banking sector has focused on branch effectiveness in improving efficiency and performance. There are potential methods to reduce all costs and to raise the performance of the banks. One way is to reduce branch costs. In the banking sector, all banks desire to know their branch effectiveness in comparison to others. In this study, we analyzed privately owned bank branches’ effectiveness for 2015 in Turkey. We calculated nine banks’ variables to estimate ideal solutions of relative proximity using the TOPSIS method. According to the results, T. Garanti Bankası ranked first, Tekstil Bankası ranked second and Turkish Bank ranked third in branch effectiveness for 2015 in Turkey. According to the Spearman’s Rho test statistics, there are important results, including ROE’s link to Assets and Deposits with a positive and high coefficient that is significantly correlated at the 0.01 level. Personnel Cost is additionally linked with Assets, Deposits and ROE, significantly at the 0.01 and 0.05 levels respectively.