A multicriteria methodology for developing a performance measurement model for bank branches

The evaluation of the performance and the dynamics of bank branches is an important component in the management of every financial institution. The information provided from such an evaluation contributes to the design of appropriate strategies for improving a bank's effectiveness. This paper presents the development of a performance measurement model for the branch network of a leading Greek commercial bank. The analysis concerns the network of the branches for a time period from 1999 to 2001. Given the current performance measurement system which is applied by the bank, a new multicriteria performance measurement model is developed which is as consistent as possible with the system currently in use. The model is fitted on the data of the branches for 1999 and 2000 and is tested on the 2001 data. The development of the multicriteria model is implemented through linear programming techniques while its performance is compared to traditional regression analysis. The stability and performance of the model are analyzed through bootstrap techniques.