Risk Management in
Islamic Financial Instruments
83
Chart 4.28: Branch Performance (Total Deposit (Funds Collected)/Total Number of Branches-
Ratio & Loans/Total Number of Branches-Ratio)
Source: Turkish Banking Sector Interactive Bulletin 2014
Liquidity Ratios
Two liquidity ratios are analyzed, a) Weighted Average Maturity of Securities (Day) Ratio and
b) Weighted Average Maturity of Securities Held for Trading (Day) Ratio. An Increasing trend
in the Weighted Average Maturity of Securities (Day) Ratio suggests that, in general, Turkish
conventional banks are investing more in less liquid assets. However, the trend is otherwise
different and downward since 2007 for Islamic banks. Generally, the Islamic banks tend to
hold lower ratios (568.91 in 2009 and decreasing towards 419.09 in 2014), compared to their
conventional counterparts (1203.20 in 2009 and increasing towards 1938.50 in 2014). The
trend in the Weighted Average Maturity of Securities Held for Trading (Day) Ratio is rather
stable for conventional banks. However, for the Islamic banks, the trend shows some
interesting caveats. After 2008, Islamic banks have stopped holding securities for trading
purpose, as the ratios are zero since 2009.
Chart 4.29: Weighted Average Maturity of Securities (Day)-Ratio
Source: Turkish Banking Sector Interactive Bulletin 2014