A Multiple Criteria Framework to Evaluate Bank Branch Potential Attractiveness

Paulo Rodrigues and Fernando A. F. Ferreira
Authors registered in the RePEc Author Service: Sérgio Pereira Santos

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: Remarkable progress has occurred over the years in the performance evaluation of bank branches. Even though financial measures are usually considered the most important in assessing branch viability, we posit that insufficient attention has been given to other factors that affect the branches’ potential profitability and attractiveness. Based on the integrated used of cognitive maps and MCDA techniques, we propose a framework that adds value to the way that potential attractiveness criteria to assess bank branches are selected and to the way that the trade-offs between those criteria are obtained. This framework is the result of a process involving several directors from the five largest banks operating in Portugal, and follows a constructivist approach. Our findings suggest that the use of cognitive maps systematically identifies previously omitted criteria that may assess potential attractiveness. The use of MCDA techniques may clarify and add transparency to the way trade-offs are dealt with. Advantages and disadvantages of the proposed framework are also discussed.

JEL-codes: C44 G21 L25 M10 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ptu:wpaper:w201010

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