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Assessing performance factors in the UK banking sector: A multicriteria methodology

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Listed:
  • K. Kosmidou
  • F. Pasiouras
  • M. Doumpos
  • C. Zopounidis

Abstract

Further consolidation takes place not only among UK banks but also across borders, since some banks see size as a key factor in remaining competitive in international markets. Therefore, it is interesting to investigate the effectiveness and performance of UK banks. Based on their assets, banks are distinguished into small and large ones and a classification of UK banks in a multivariate environment for the period 1998–2002 takes place. The PAIRCLAS multicriteria methodology is employed to investigate the performance of UK small and large banks over multiple criteria, such as asset quality, capital adequacy, liquidity and efficiency/profitability. A comparison with discriminant analysis (DA) and logistic regression (LR) facilitates the investigation of the relative performance of PAIRCLAS against them. The results of the study determine the key factors that specify the classification of a bank as small or large and provide us with the responsible banking decision makers for future readjustments. Copyright Springer-Verlag 2006

Suggested Citation

  • K. Kosmidou & F. Pasiouras & M. Doumpos & C. Zopounidis, 2006. "Assessing performance factors in the UK banking sector: A multicriteria methodology," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 14(1), pages 25-44, February.
    • Handle: RePEc:spr:cejnor:v:14:y:2006:i:1:p:25-44
    DOI: 10.1007/s10100-006-0158-5
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    More about this item

    Keywords

    G21; C69; UK banks; efficiency; performance; mutlicriteria decision aid;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C69 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Other

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