A two steps AHP-PROMETHEEII application to assess banking financial performance

Abstract

This study with the objectif to assess the Algerian banking financial performance using the Analytic Hierarchy Process (AHP) and Preference Ranking Organization Method for Enrichment Evaluations (PROMETHEEII) combined approcach, with a sample comprise of 12 Banks which of whom 4 public banks and 8 private banks for a period span from 2019 to 2021. The approach used evaluate the banking financial performance using seven important financial pointers (NPM, ROE, ATR, CIR, LCR, DER and ICR) taking into account the banking main financial dimensions of Profitability, liquidity, operational efficiency leverage and solvency. The main results AHP-PROMETHEEII show that private banks outranked all the public banks during the period of analysis. Along with, the results of the sensitivity analysis largely align with the results of the PROMETHEEII, indicating the robustness of the ranking method