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Ranking Iranian Private Banks Based on the CAMELS Model Using the AHP Hybrid Approach and TOPSIS

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  • Shiva Ghasempour
  • Mohamadjavad Salami

Abstract

This research was done to evaluate and compare performance of Iranian banks based on the CAMELS rating system. For this purpose, after studying the related literature, factors relating to efficiency and soundness were identified and used to assess banks; these were Capital Adequacy, Asset Quality, Management Capability, Earnings, Liquidity, and Sensitivity to Market Risk. Then, an importance coefficient was determined for each of these factors using the Analytical Hierarchy Process. Iranian private banks were then ranked according to evaluations on indices from audited financial statements at the end of the Solar year 1993 (March 2015) and the TOPSIS method. Results determined high-ranking banks as follows: Pasargad Bank, Khavarmiane, Karafarin, Sina and Ansar.

Suggested Citation

  • Shiva Ghasempour & Mohamadjavad Salami, 2016. "Ranking Iranian Private Banks Based on the CAMELS Model Using the AHP Hybrid Approach and TOPSIS," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(4), pages 52-62, October.
    • Handle: RePEc:hur:ijaraf:v:6:y:2016:i:4:p:52-62
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    References listed on IDEAS

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    3. Mohammad Rezaei & Saeedeh Ketabi, 2016. "Ranking the Banks through Performance Evaluation by Integrating Fuzzy AHP and TOPSIS Methods: A Study of Iranian Private Banks," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(3), pages 19-30, July.
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    6. Richard S. Barr & Kory A. Killgo & Thomas F. Siems & Sheri Zimmel, 1999. "Evaluating the productive efficiency and performance of U.S. commercial banks," Financial Industry Studies Working Paper 99-3, Federal Reserve Bank of Dallas.
    7. Alexis Derviz & JiÅí Podpiera, 2008. "Predicting Bank CAMELS and S&P Ratings: The Case of the Czech Republic," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 44(1), pages 117-130, January.
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    Cited by:

    1. Ilkut Elif Kandil Goker & Tayfun Arar, 2017. "Specifying the Determinants of Brand Value by Using AHP Method," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(1), pages 98-106, January.

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