How Has COVID-19 Impacted the Performance of State-owned Deposit Banks? SV-EDAS Model Application

Abstract

The COVID-19 pandemic has triggered the deepest global economic recession in recent years, causing a global economic shock all over the world. The uncertainties and risks that emerged with the COVID-19 epidemic caused significant disruptions in the services provided by banks, one of the most important actors of financial markets, to their customers. In this study, it is aimed to empirically examine the impact of the COVID-19 pandemic on the financial performance of state-owned deposit banks. For this purpose, 10 financial ratios are employed as performance criteria in the study. These ratios are respectively capital adequacy ratio, equity-to-asset ratio, deposit-to-asset ratio, loan-to-deposit ratio, liquidity ratio, return on equity, income diversification ratio, personnel expenses ratio, received loan ratio and fixed asset ratio. In the study, a hybrid MCDM (Multi Criteria Decision Making) model consisting of SV (Statistical Variance) and EDAS (Evaluation based on Distance from Average Solution) procedures is utilized to determine how the financial performance of state-owned deposit banks is affected by the COVID-19 pandemic. The results obtained from the hybrid MCDM model proposed for bank performance assessment reveal that the financial performance of state-owned deposit banks is affected by the COVID-19 pandemic.