International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Comparison of Financial Performances of Domestic and Foreign Banks: The Case of Turkey
Mesut Doğan

Banking system plays an important role in the development of a country’s economy and its financial stability. The aim of this study is to compare financial performances of foreign and domestic banks, which operate in Turkish Banking Sector. For this purpose, data of 10 domestic and 10 foreign banks, which operated, between the years 2005-2011 have been used. In this study, differences of domestic and foreign banks in terms of profitability, capital adequacy, asset quality, riskiness, size, liquidity and management effectiveness have been put forth. As a result of the study, it is determined that asset quality, return on equities, total assets and management effectiveness of domestic banks are higher than foreign banks. On the other hand, domestic banks are determined to have a lesser capital adequacy ratio than foreign banks.

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