Ranking the Efficiency and Soundness of Business Banks Using a Combined Method of Data Envelopment Analysis and Fuzzy VIKOR

Subject Areas : Econometrics and Financial Applications of other Theories (Stochastic Processes, (Stochastic) Partial Differential Equations, Dynamical Systems)

Manouchehr Khorramin ¹ , Ghodrat Allah Talebnia ² , Mohammad Hossein Ranjbar ³ , Ali Amiri ⁴

1 - Department of Accounting, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran
2 - Department of Accounting,Science and Research Branch,Islamic Azad University,Theran,Iran
3 - Department of Accounting, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran
4 - Department of Accounting, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran

Received: 2019-07-22 Accepted : 2020-01-01 Published : 2021-07-01

Keywords: trapezoidal number, Fuzzy VIKOR, Data envelopment analysis, Efficiency,

Abstract :

The present study provides a systematic method for assessing the efficiency and soundness of banks. The analysis is based on a set of benchmarks related to the financial performance of banks. In this regard, this research has explored a model for evaluating accepted banks in Tehran Stock Exchange using the data envelopment analysis method. One of the most important applications of this technique is measuring the efficiency of bank branches. In addition, paying special attention to the health of the banking system corresponds to the health of the society’s economics. It is essential to implement precise analysis benchmarks to evaluate banks and other financial institutions due to their importance in the economics. One of these benchmarks is efficiency. In this study, 18 Iranian business banks have been analysed using data envelopment analysis on the basis of financial ratios. Also, their efficiency has been computed using the output-based CCR envelopment model, assuming a constant efficiency-scale ratio. The results suggest that Gardeshgari bank has been selected as the most efficient and healthy bank between 2011 and 2015 on the basis of financial and non-financial criteria, and using the trapezoidal fuzzy number method.

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