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<p>This study comparatively analyzes the financial resilience of six foreign-owned and six domestically owned private banks operating in Türkiye during the 2016–2024 period. The main objective is to evaluate the performance of alternative Z-Score methodologies in measuring bank vulnerability under conditions of high macroeconomic volatility and to determine whether ownership structure affects financial resilience. The traditional Altman Z-Score (1968) and the service sector Z-Score model (1993) were used as benchmarks. Fundamental analysis was performed using the volatility-sensitive banking Z-Score and the risk-adjusted Z-Score (CAR + µROA) in 3 and 5-year moving averages. Periodic heterogeneity was examined using t-tests for pre-crisis, COVID, and recovery periods, and the results were tested with Pooled OLS, Bank Fixed Effects, and Random Effects panel models. The Hausman test showed that the Random Effects model was consistent. The findings reveal that Altman models have methodological limitations for the banking sector. Domestic banks generally have higher capital buffers and risk adjusted Z-Scores across the sample. The COVID period reduced resilience in all banks, and a strong recovery was observed in the post-2022 period. Panel regression results reveal that the dummy variable for foreign banks is negative and statistically significant. The foreign variable and ownership structure are significant in relation to financial resilience, but the pandemic effect did not differ according to bank type. Overall, the study contributes to the literature by demonstrating the importance of combining volatility sensitive and structural indicators when assessing the vulnerability of the banking sector in emerging markets.</p>

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Comparison of Financial Failures in Selected Foreign and Domestic Capital Private Banks in Türkiye Using Z-Score Methods

  • 期刊论文

  • 发表日期：

    2026年4月16日

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  • Recep Alper Çelik

摘要

This study comparatively analyzes the financial resilience of six foreign-owned and six domestically owned private banks operating in Türkiye during the 2016–2024 period. The main objective is to evaluate the performance of alternative Z-Score methodologies in measuring bank vulnerability under conditions of high macroeconomic volatility and to determine whether ownership structure affects financial resilience. The traditional Altman Z-Score (1968) and the service sector Z-Score model (1993) were used as benchmarks. Fundamental analysis was performed using the volatility-sensitive banking Z-Score and the risk-adjusted Z-Score (CAR + µROA) in 3 and 5-year moving averages. Periodic heterogeneity was examined using t-tests for pre-crisis, COVID, and recovery periods, and the results were tested with Pooled OLS, Bank Fixed Effects, and Random Effects panel models. The Hausman test showed that the Random Effects model was consistent. The findings reveal that Altman models have methodological limitations for the banking sector. Domestic banks generally have higher capital buffers and risk adjusted Z-Scores across the sample. The COVID period reduced resilience in all banks, and a strong recovery was observed in the post-2022 period. Panel regression results reveal that the dummy variable for foreign banks is negative and statistically significant. The foreign variable and ownership structure are significant in relation to financial resilience, but the pandemic effect did not differ according to bank type. Overall, the study contributes to the literature by demonstrating the importance of combining volatility sensitive and structural indicators when assessing the vulnerability of the banking sector in emerging markets.