Lexicographic Goal Programming Model for Bank’s Performance Management

Ali Alarjani,Teg Alam,Wei-Chiang Hong

doi:10.1155/2021/8011578

Ali Alarjani, Teg Alam + Show 1 more

Open Access

https://doi.org/10.1155/2021/8011578

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Abstract

Any bank’s financial management is essential to preparing the assets and liabilities for multiple goals. In this paper, we develop an optimal bank model for the financial management department in the Kingdom of Saudi Arabia. The lexicographic goal programming model was used to formulate the banks’ performance management. In this study, the six goals of one of the leading banks in Saudi Arabia, namely, maximize asset, minimize liability, maximize equity, maximize operating income, maximize net income, and maximizing total goal achievements in the financial statement, were studied. To illustrate the model, we have focused on Al Rajhi Bank’s financial statements as a case study. The data was obtained from the banks’ financial statements. The outcomes of the study exhibited that all goals were accomplished. This proposed model is dynamic because it will help examine the banks’ financial strengths located in the kingdom. As a result, the proposed model can guide banking firms in making decisions and developing strategies to deal with numerous monetary circumstances.

Highlights

Asset and liability management is a critical element in balancing a company’s assets and liabilities.Asset and liability management is primarily concerned with liquidity and interest rates
The primary goal of this research is to optimize the profitable structure of the Al Rajhi Bank in the Kingdom of Saudi Arabia
We present a lexicographic goal programming (LGP) model for the optimal performance management of Al Rajhi Bank for the financial management department

Summary

Introduction

Asset and liability management is a critical element in balancing a company’s assets and liabilities. Asset and liability management is primarily concerned with liquidity and interest rates. The primary goal of this research is to optimize the profitable structure of the Al Rajhi Bank in the Kingdom of Saudi Arabia. Al Rajhi Bank, founded in 1957, is one of the world’s largest banks, with total assets of SR 411 billion (US$ 125 billion), a paid-up capital of SR 25 billion (US$ 6.67 billion), and a workforce of over 9600 associates. Al Rajhi Bank, headquartered in Riyadh, Saudi Arabia, has a vast network of over 543 branches, 142 dedicated ladies’ branches, more than 5210 ATMs, and 204549 POS terminals installed with merchant’s extensive consumer base of any bank in the Kingdom [1]

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