Profitability Analysis of Banks in Türkiye: Integrated LODECI-DOBI Method
Chapter from the book:
Buğan,
M.
F.
&
Kılıç,
Y.
&
Kırcı Çevik,
N.
(eds.)
2025.
Evolution of Financial Markets V.
Synopsis
This study examines the criteria related to profitability from the financial performance indicators of commercial banks. In this context, four profitability criteria were analyzed. The aim of the research is to determine the importance weights of the 2024 year-end profitability ratios indicators of the 10 commercial banks with the largest sector share operating in Turkey and to make a profitability performance ranking among banks. In the study, two multi-criteria decision making (MCDM) methods were integrated and applied. By moving the decision-making process to a structured data framework, MCDM methods enable not only the selection of the most appropriate alternative but also the improvement of the quality of the decision. Criterion weights were determined by LODECI (LOgarithmic DEcomposition Of Criteria Importance) method, and performance ranking was determined by DOBI (DOmbi Bonferroni) method. As a result of the LODECI method, the most effective criteria were "Net profit for the period/Paid-in capital", followed by "Profit before tax/Total assets" and "Average return on assets". "Return on average equity" has been determined as the criterion with the lowest importance. In the ranking made by the DOBI method, Garanti Bank stood out as the bank with the highest performance, while Halkbank was the bank with the lowest performance. The results can be used in strategic planning for decision-makers in the banking sector and are recommended to be evaluated together with the analyzes made with different methods.
