Ranking the Iranian Private Banks through CAMELS Framework by Integrating AHP and ARAS Method

Abstract

Banks manage their funds by guiding the collected cash from the sectors that have surplus to the ones that are facing a shortage of (cash) liquidity. So, it is highly important to evaluate bank performance because of the impact that these institutions have in the growth and economic development of the countries. This research aims to evaluate and compare the performance of Iranian banks based on the Camels rating system. For this purpose, after studying the related literature, efficiency and soundness and safe assessment factors of the banks on the area of Capital Adequacy, Asset Quality, Management Capability, Earnings, Liquidity, and Sensitivity to Market Risk were detected. Then, using Analytical Hierarchy Process technique, the weights of each factor were determined. The results were used to evaluate the performance of the several Private Banks in years 2012-2017. And then they were ranked by using ARAS technique. The results show that Khavarmiyane, Pasargad, Ghavamin, Karafarin, and Sina banks had better function in comparison to other studied banks in years 2012-2017.

Keywords

• Analytical Hierarchy Process
• ARAS
• Bank Rating
• CAMELS Rating System