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Optimization on the Financial Management of Banks with Two-Stage Goal Programming Model

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Book cover Computational Science and Technology

Part of the book series: Lecture Notes in Electrical Engineering ((LNEE,volume 724))

Abstract

The strategic planning is important in bank financial management. The banks and financial institutions have to achieve multiple goals in optimizing asset, liability, equity, earnings, profit and optimum management item. The subjective judgment in assigning weight of the goals is a drawback in financial management of the banks since it may cause inconsistent judgment. In addition, there are no comprehensive studies done on comparison among the banks for benchmarking based on the past studies in optimizing the financial management. Hence, this paper aims to improve the bank financial management by proposing a two-stage goal programming (GP) model to compare and optimize the bank financial management. The proposed model is developed based on entropy method in determining the weight of the goal at the first stage before optimizing the financial management with GP model at the second stage. Four listed banks in Malaysia are investigated in this study. The results indicate that the goal for asset, equity and optimum management item have been achieved by all banks. Furthermore, the target value of asset, equity, earning and profit can be increased according to the optimal solution of the proposed model. The significance of this paper is to provide insights to the banks for further improvement based on the optimal solution of the proposed model.

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Author information

Authors and Affiliations

  1. Department of Physical and Mathematical Science, Faculty of Science, Universiti Tunku Abdul Rahman, Kampar, Perak, Malaysia

    Lam Weng Siew, Lam Weng Hoe & Chen Jia Wai

  2. Centre for Business and Management, Universiti Tunku Abdul Rahman, Kampar, Perak, Malaysia

    Lam Weng Siew & Lam Weng Hoe

Authors
  1. Lam Weng Siew
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  2. Lam Weng Hoe
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  3. Chen Jia Wai
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Corresponding author

Correspondence to Lam Weng Siew .

Editor information

Editors and Affiliations

  1. Faculty of Computing and Informatics, Universiti Malaysia Sabah, Kota Kinabalu, Sabah, Malaysia

    Rayner Alfred

  2. Research Center for Entertainment Science, Japan Advanced Institute of Science and Technology, Nomi, Ishikawa, Japan

    Hiroyuki Iida

  3. Faculty of Computer Science and Information Technology, Department of Informatics, Universitas Mulawarman, Samarinda, Kalimantan Timur, Indonesia

    Haviluddin Haviluddin

  4. Department of Environmental Management, Faculty of Environment, Society and Design, Lincoln University, Christchurch, New Zealand

    Patricia Anthony

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Siew, L.W., Hoe, L.W., Wai, C.J. (2021). Optimization on the Financial Management of Banks with Two-Stage Goal Programming Model. In: Alfred, R., Iida, H., Haviluddin, H., Anthony, P. (eds) Computational Science and Technology. Lecture Notes in Electrical Engineering, vol 724. Springer, Singapore. https://doi.org/10.1007/978-981-33-4069-5_11

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  • DOI: https://doi.org/10.1007/978-981-33-4069-5_11

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  • Publisher Name: Springer, Singapore

  • Print ISBN: 978-981-33-4068-8

  • Online ISBN: 978-981-33-4069-5

  • eBook Packages: Computer ScienceComputer Science (R0)

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