The efficiency of the Turkish banking system during 2000-2005

This study analyses the efficiency of the Turkish bank system over the period 2000-2005. The estimation showed that inefficiency decreases over the period under consideration and the analysis unambiguously indicates that the Turkish banking system has a large potential for improvement. The state banks appear to reduce their costs more comfortably than the private banks by using their size due to their low employee expenses and less expensive cost of borrowing. The restructuring programme appears to have transformed the state-banks into the more efficient and profitable institutions.