Title: Do partially privatised banks lag behind in performance? A case study on VakιfBank

Authors: S. Ahmet Menteş

Addresses: Faculty of Economics and Administrative Sciences, Department of Business, Namık Kemal University, Değirmenalti – 59030, Tekirdag, Turkey

Abstract: This study analyses the privatisation of VakιfBank in which the state (Turkey) retained majority control after the privatisation. In this context, the study compares post-privatisation financial performance of the bank with its privately owned competitors. Findings of the previous studies on the subject suggest that retained state control after privatisation will result in only modest (marginal) performance improvements. The study predicts that VakιfBank is not an exception and hypothesises VakιfBank's post-privatisation performance improvement to be modest compared with its privately owned competitors. Four different hypotheses for the four selected performance measures are constructed to test the post-privatisation performance of VakιfBank. However, the findings reveal that VakιfBank is an exception and achieved significant improvements in three of the four performance measures compared with its privately owned competitors. The study discusses the reasons behind the findings and the governance-related risks that VakιfBank investors face.

Keywords: partial privatisation; company performance; corporate governance; VakιfBank; banking; privatised banks; Turkey; state control; majority control; post-privatisation performance; financial performance; private banks; competitors; modest improvements; marginal improvements; performance improvements; performance measures; governance-related risks; investors; business solutions; developing countries; globalisation; business advancement.

DOI: 10.1504/JGBA.2012.052392

Journal for Global Business Advancement, 2012 Vol.5 No.4, pp.321 - 331

Available online: 28 Feb 2013 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article