The Impact of Changes in Ownership Structure After 2001 Crisis on Bank Performance in Turkey2-S2.0

Abstract

Turkish banking sector has gone through a major restructuring following the 2001 crisis and due to the intensive entries of foreign banks into the sector, changes in the ownership of banks in the sector has been observed. The performance impact of structural changes in Turkish banking sector in post 2001 crisis period has been analyzed by bilateral comparison of sector banks based on their ownership forms. The analyses indicate that public banks are found to improve their performance and gain a relative competitive position. On the other hand, wholly owned foreign banks operating in the sector could not differentiate their performance relative to domestic banks and even lagged beyond these banks in the majority of the performance criteria. One of the most remarkable and unique results gathered from the study is that domestic banks with a foreign bank partnership had better performance effectiveness compared to wholly owned foreign banks.