Applying AHP in Evaluation of Vietnamese Commercial Banks

Bank rankings are one of the ways to rate the bank system and to create competitive advantages, which have emerged as the central issue and considered as one of the most important organizational innovation. This research is objective to explore and to demonstrate utility of Analytic Hierarchy Process (AHP) application in banking for the purpose of proposing suitable model for partners evaluation and selecting banking strategic alliances in Vietnam. The AHP is applied to examine what criteria should be encompassed in evaluating and examining the importance weightings of influential criteria when ranking the bank system. In this study, a short review of literature regarding application AHP in banking decision-making is presented, focusing on partner evaluation criteria and methods to propose model for partner evaluation and selecting strategic banking for the current study. After a long process of calculation based on AHP, I have come up with the final rankings according expert’s interview: ACB’s percentages have change widely from each sub-criterion; finally it gets 12.98% at the top of the list. Coming very closely downwards are DAB, SeAbank etc., at the bottom of the rankings is SGB at 7.41%. By this paper, author would contribute to the ranking process of the banking system, in general, and the special case of Vietnamese banking a very modern model to apply, then to choose the right alliance for further cooperation, not only for banking system but it can be applied for a lot of industries