Classification of Turkish Commercial Banks Under Fuzzy c-Means Clustering

As the major actors of credit system, banks have a great importance not just for financial system but also for the whole of economy. Thus, financial soundness o f banks, affected by many financial risks, should be monitored closely. This study focuses on classification of the deposit and participation banks of Turkey regarding their soundness. Financial Stability Indicators (FSIs) are used to attain this goal. Research method is mainly based on f uzzy c - means clustering method which relies on fuzzy logic. The results show that the participation banks are grouped together in the same cluster. Also, Denizbank A.Þ., Finansbank A.Þ., Yapý ve Kredi Bankasý A.Þ. and Türk Ekonomi Bankasý A.Þ., having similar characteristics regarding ownership and scope of financial services, are found to be grouped together in all periods under consideration. Moreover, it has been seen that size is not the most decisive factor for classification purposes.