Performance Evaluation of Banks using Fuzzy AHP and TOPSIS, Case study: State-owned Banks, Partially Private and Private Banks in Iran

Banks as financial and service institutions have a specific place in each country’s economy since their effective role in money and wealth circulation. Banks’ constructive and efficient activities can positively effect the economic sections’ growth and increase of production in each country. The aim of this study is to propose a fuzzy multi-criteria decision model to evaluate the performance of banks. Each performance evaluation model is a tool which encloses diverse information for decision makers after being performed. This specific application of these models contributes in responding the questions existing in decision makers’ minds. In this paper, the affecting criteria in two financial and non-financial levels were selected and investigated after library studies and using experts’ viewpoints. Standard questionnaires were designed and distributed among state-owned banks, partially private and private banks’ experts and high rank managers. 10 branches of each above mentioned banks were selected as a case study. The data was extracted from questionnaires and the variables were weighted using fuzzy AHP and ultimately the banks were ranked applying TOPSIS technique. Based on the findings, profitability in financial level and service quality in non-financial level have gained the greatest importance according to experts’ view points. In total ranking of management performance, private banks was placed at the first rank and partially private and private banks were ranked as the second and third, respectively. The results implied that having acceptable financial performance does not lead to having satisfactory non-financial performance spontaneously and in today’s competitive environment, managers need to observe both financial and non-financial performance in order to succeed.