Estimating Financial Failure Of The Turkish Banks Using Artificial Neural Networks

İpek M., Bölükbaş U. , Gündoğar E.

The 2011 New Orleans International Academic Conference, Louisiana, United States Of America, 14 - 16 March 2011, pp.629-635

  • Publication Type: Conference Paper / Full Text
  • City: Louisiana
  • Country: United States Of America
  • Page Numbers: pp.629-635


Banks are the most important elements in financial companies and have lots of important tasks

with their functions. Banks both finance the sector which demand funds and take funds from the

suppliers. In addition, banks should create funds to improve their processes. Because of liabilities,

banks should estimate the probable financial failures.

In this study, financial ratios that are financially effective and indicate the performance of banks

in Turkey are given. Based on these performance ratios, two models are developed for estimating

the probable financial failure. One of them is the logistic regression and the other one is the

artificial neural network model. The performance of the artificial neural network model is better

than the logistic regression model for estimating the financial failures of the banks.