Performance Evaluation and Ranking of Turkish Banking Sector

In this paper, Data Envelopment Analysis (DEA) is applied to a dataset of commercial banks operated in Turkey for a period 2005-2013 in order to measure technical efficiency of banks. Firstly, we calculated the technical, pure technical and scale efficiency scores for individual banks and highlighted the highest and lowest efficiency scores. Then, we divided banks into three categories for analytical purposes: state owned banks, privately owned banks and all banks. We found that state owned banks are the most efficient. Moreover, it is found that pure technical efficiency contributes more in compared to technical efficiency. The scale efficiency is found to be main source of overall technical efficiency. We observed that decreasing trend in pure technical efficiency whereas an opposite trend is found in scale efficiency.