Development of a multi-criteria decision-making model for comparing the performance of Turkish commercial banks

Yusuf Tansel Ic, Beril Celik, Sevcan Kavak and Busra Baki

Journal of Advances in Management Research, 2020, vol. 18, issue 2, 250-272

Abstract: Purpose - In this study, financial performance evaluation model is developed for banks aims to measure and compare the performances of banks based on their financial ratios. Design/methodology/approach - Regression-AHP (Analytic Hierarchy Process)-VIKOR (Vise Kriterijumska Optimizacija I Kompromisno Resenje) integrated methodology is used. First, a literature review is done to find various bank performance measurement models with their financial metrics being compared. Then, pair-wise comparison matrices are used to find the relative weights of criteria (financial ratios) and finally VIKOR method is used to rank the banks. Findings - It is believed that an AHP-based VIKOR framework helps to take up the explicit account of multi-criteria decision making (MCDM) methodologies in decision making and for selecting the best bank in the Turkish economy. Research limitations/implications - In this paper, only selected financial ratios are used and analyzed for the multi-criteria decision-making (MCDM) method. Originality/value - The systematic solution procedure of performance evaluating the banks helps the decision-makers to carry out performance evaluation studies for improving economic and managerial performance. This comparative study and analysis of bank performance using the regression-AHP-VIKOR combined model is presented for the first time. The authors have not become aware of any such studies in their literature review. This paper is an original framework of the application of the regression-AHP-VIKOR on the various financial performance metrics.

Keywords: Bank performance; Financial performance measurement; Regression; AHP; VIKOR (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jamrpp:jamr-05-2020-0083

DOI: 10.1108/JAMR-05-2020-0083

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