A multi-criteria analysis of the banking system in the Republic of Croatia

Abstract

This paper analysis business strategies of banks by solving a goal programming model using a multi-criteria decision making approach. Multi-criteria business performance is represented as the weighted sum of selected indicators, and the weights or importance of the indicators are a solution of the corresponding problem of goal programming. The ten biggest commercial banks (according to size of balance sheet assets) in the Republic of Croatia were chosen. For an analysis of the operations of the ten banks, three groups of indicators were chosen - profitability, security/risk and liquidity - which were calculated from the banks’ financial reports for the year 2010.