MULTI CRITERIA DECISION MAKING ON BANK PERFORMANCES
Article Sidebar
Main Article Content
Abstract
Multi-Criteria Decision Making (MCDM) model, specifically the Analytic Hierarchy Process (AHP). The study's objectives were to identify key performance indicators (KPIs) relevant to bank evaluation, assess the relative importance of each KPI, develop an MCDM model considering multiple criteria, and apply the model to a sample of Nigerian commercial banks for performance comparison. The study employed four main criteria for evaluation: Customer Satisfaction (CR1), Financial Performance (CR2), Employee Productivity (CR3), and Risk Management (CR4). These criteria were selected based on their significance in the banking sector and their potential impact on overall bank performance. The alternatives considered for analysis were three branches of Nigerian commercial banks: Branch A, Branch B, and Branch C. Using the AHP model, weights were assigned to each criterion to reflect their relative importance. The criteria weights were determined through expert judgment and pairwise comparisons. Subsequently, the performance of each bank branch was evaluated based on the weighted criteria, and an overall performance score was calculated. The analysis results indicated that Branch C had the highest overall performance score, followed by Branch A and Branch B, respectively. The sensitivity analysis was conducted to assess the impact of changes in criteria weights on the overall performance rankings. The study concluded that Branch C demonstrated superior performance across the evaluated criteria, suggesting potential areas of strength and opportunities for improvement in the other branches. In conclusion, the application of the AHP model provided a structured approach to evaluating the performance of Nigeria's commercial banks based on multiple criteria. The findings of this study can inform strategic decision-making processes within the banking sector, facilitate performance benchmarking, and contribute to efforts to enhance overall bank performance and competitiveness in Nigeria's financial market.
JEL Classification Codes: G32, F65, L66, L25, M41.
Downloads
Article Details
Issue
Section
This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
References
Adebiyi, S. O., Olujide, J. O., & Oyedele, O. O. (2014). Economic integration and foreign exchange management in Nigeria: The challenges from global financial crisis. Journal of Economics and Sustainable Development, 5(23), 125-133.
Adegbie, F. F., Ogungbemi, O. A., & Adeosun, A. O. (2018). Performance evaluation of selected Nigerian banks using grey relational analysis. Journal of Economics and Management Research, 7(1), 78-95.
Adesina, K. S., & Akinlabi, B. H. (2015). Customer satisfaction and its implications for bank performance in Nigeria. British Journal of Marketing Studies, 3(5), 44-53.
Adewuyi, I. D., Adetunji, A. A., & Olowookere, J. K. (2019). Evaluation of the performance of Nigerian commercial banks using data envelopment analysis. Journal of Economics and Business Research, 25(1), 7-22.
Ayeni, R. K., Afolabi, O. D., & Adeyemi, A. O. (2016). Performance evaluation of Nigerian banks using fuzzy analytic hierarchy process. International Journal of Economics and Financial Issues, 6(3), 779-785.
Ibrahim, M., Hassan, M. S., & Tureta, S. I. (2020). Performance evaluation of Nigerian commercial banks using TOPSIS method. International Journal of Research in Business and Social Science, 9(4), 286-299.
Ogundana, O. M., Ojokuku, R. M., & Ojokuku, A. M. (2017). An application of analytic hierarchy process to commercial banks performance evaluation in Nigeria. International Journal of Economics and Financial Issues, 7(5), 633-640.
Okafor, R. G., & Ezeliora, M. M. (2017). The impact of financial performance indicators on commercial banks' profitability in Nigeria. International Journal of Management Sciences and Business Research, 6(1), 62-70.
Oladele, P. O. (2016). Risk management practices and bank performance in Nigeria. International Journal of Economics, Commerce and Management, 4(5), 634-648.
Olaniyan, T. A., & Ogunnaike, O. O. (2015). Impact of employee satisfaction on customer satisfaction in the Nigerian banking industry. Journal of Marketing and Consumer Research, 15, 54-63.
Oke, M. O., Oluwatoyin, M., & Adeusi, S. O. (2016). Performance evaluation of Nigerian commercial banks: An application of analytic hierarchy process. European Journal of Business and Management, 8(4), 19-29.
Saaty, T. L. (2008). Decision making with the analytic hierarchy process. International Journal of Services Sciences, 1(1), 83-98.
Stankevičienė, J., & Mencaitė, E. (2012). The evaluation of bank performance using a multicriteria decision making model: A case study on Lithuanian commercial banks. Technological and Economic Development of Economy, 18(1), 189-205.
Stojčić, M., Zavadskas, E. K., Pamučar, D., Stević, Ž., & Mardani, A. (2019). Application of MCDM methods in sustainability engineering: A literature review 2008–2018. Symmetry, 11(3), 350.
Zavadskas, E. K., Turskis, Z., & Kildienė, S. (2014). State of art surveys of overviews on MCDM/MADM methods. Technological and Economic Development of Economy, 20(1), 165-179.