Multi-Criteria Decision-Making Model Evaluating the Performance of Vietnamese Commercial Banks

Dinh Xuan Cuong,Hoang Thi Hien,Tran Long

doi:10.5430/ijfr.v9n1p132

Abstract

The commercial banks (CBs) performance evaluating has been a necessary problem in currently integration trend and usually implemented by a committee of experts under criteria selected. Therefore, it is considered as a Multi - Criteria Decision - Making model (MCDM). Nowadays, there have been many researches proposing various standards and models to evaluate and rank CBs. But in Vietnam, the number of studies related to the Vietnamese banking evaluation model have still been limited. As a result, this study develops a multi-criteria decision model integrating Fuzzy Analytical Hierarchy Process (FAHP) and Fuzzy the Technique for Order of Preference by Similarity to Ideal Solution (FTOPSIS). The proposed model has evaluated and ranked five Vietnamese commercial banks including CTG, VCB, BIDV, TCB and MB. The paper revealed their ranks. Besides, the results of the research show that the Analytical Hierarchy Process (AHP) model is suitable for applying it to the process evaluating bank performance.

Highlights

IntroductionCommercial bank is one of the most important financial institutions
In most countries, commercial bank is one of the most important financial institutions
Multi-criteria decision making mainly includes: Analytic hierarchy process (AHP), Analytic network process (ANP), Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS).The banking performance evaluation is complicated with linguistic judgments under each criterion, this study develops a multi-criteria decision making model integrating Analytical Hierarchy Process (AHP) and TOPSIS under a set of criteria to evaluate and rank commercial banks (CBs) in Vietnam

Summary

Introduction

Commercial bank is one of the most important financial institutions. It can attract financial flows, offer offering credit and various financial services. These activities have a vital impact on national economic development. The position and prestige of Vietnamese CBs in the global transaction banking will be enhanced. Besides these opportunities, the banking system has to face competition from international banks in terms of price, service, distribution. Vietnamese CBs are highly unlikely to assert their position in international markets because of their weak competitive abilities (Pham, 2010)

Methods

Results

Discussion

Conclusion