Profitability prediction of Turkish banking industry: A comparative analysis with data science and fuzzy ANP

Abstract

In this study, it is aimed to estimate the factors affecting the profitability of the Turkish banking sector. For this purpose, 34 different variables were firstly determined by literature review. Then, with the help of decision trees method, the most important 8 variables were selected. These variables were also evaluated with fuzzy ANP approach. As a result, it is understood that the foreign exchange position is the most important variable for the profitability of the Turkish banking sector. Based on this result, it is recommended that Turkish banks take some actions to minimize the currency exchange rate risk. In this context, it is considered that financial derivative products will help the management of this mentioned risk.