Comparison of selected methods for performance evaluation of Czech and Slovak commercial banks

Abstract

The successful development of economy is based on the efficient and stable performance of commercial banks. A broad range of methods is used to evaluate them. Each method has its own specific features and logic, which results in the existence of discrepancies in the results of their evaluation. For this reason, as well as due to the elimination of model risk, numerous methods are recommended in practice to detect multidimensional disproportions in bank performance and to create a comparator base. This led to the realization of the research aimed at assessing the performance of selected Czech and Slovak banks by applying several methods and evaluating the process and outcome differences of these methods. The data were obtained from the non-consolidated financial statements published in the annual reports of the evaluated banks. The analysis showed that all methods have roughly the same results. Almost perfect correlation had been found not only among the methods of multi-criteria evaluation, but also among the other investigators.

Keywords:

• banking sector performance
• multi-criteria methods
• banking sector stability
• rating criteria
• bank ranking
• bank performance index
• MCDA methods

JEL Classification:

• C44
• G21
• L25

Additional information

Notes on contributors

Beata Gavurova

Beata GAVUROVA, PhD, Assoc. Professor, is an expert in finance, financial analysis and financial risk management. She focuses in her research work on issues of measurement and performance management in various sectors, process management and process optimization, strategic and performance benchmarking. She is involved in the preparation of national and regional strategic plans. Her dominant research area is the development and testing in the management and performance measurement, the evaluation of methodologies and the preparation of an application platform for innovative management and performance measurement with the support of ICT. She has led several national projects, participates in international focusing on the field of innovative ICT solutions in the private as well as in the public sector. She is involved in the preparation of national and regional strategic plans. She cooperates with several institutions of the health and social system in Slovakia. She is the author and co-author of more than 200 scientific publications.

Jaroslav Belas

Jaroslav BELAS, PhD, is Full Professor. He is a renowned expert in commercial banking and risk management of SMEs. He worked in the banking sector of Slovakia from 1993 to 2001. In academic field he has worked at the University of Economics in Bratislava and the Pan European University in Bratislava. He is currently at Tomas Bata University in Zlin, Faculty of Management and Economics. He is an author of 9 monographs; the results of the research activities have been outputted through 70 various scientific works that have been published in prestigious journals. He is a member of the Scientific Council of Pan European University in Bratislava and the Scientific Council of Georg Žilina publisher in Slovakia. Currently he manages 5 scientific projects.

Kristina Kocisova

Kristina KOCISOVA, PhD, is Assoc. Professor, in her research work focuses on issues of financial and banking systems, diagnostics competition, stability, efficiency of banking sector, banks or bank branches in the national economy. In her research she applies traditional techniques, but also models based on the usage of informational technology. The achieved results apply as an assistant professor in teaching subjects Banking, Central banking, Payment systems, Management of banking operations and Selected models and analysis in banking.

Tomas Kliestik

Tomas KLIESTIK, PhD, is Full Professor. He is an expert in application of quantitative mathematical statistical methods in financial management of companies and methods of risk quantification and diversification. He is currently head of the Department of Economics at the Faculty of Operation and Economics of Transport and Communications, University of Zilina. He is an author of 4 monographs; results of his research activities have been published in more than 120 various scientific works from which 31 are indexed in the Web of Science database. His works have recorded more than 450 citations from which 215 are indexed in Web of Science database. Currently he manages one scientific project financed by Slovak Research and Development Agency and one scientific project financed by Scientific Grant Agency of the Ministry of Education, Science, Research and Sport of the Slovak Republic and Slovak Academy of Sciences.