On the appraisal of consumer credit banking products within the asset quality frame: A multiple criteria application

Asset quality refers to the likelihood that the bank’s earning assets will continue to perform and requires both a qualitative and quantitative assessment. Decision problems like the “internal appraisal of banking products”, are problems with strong multiple-criteria character and it seems that the methodological framework of Multiple Criteria Decision Making could provide a reliable solution. In this paper, the Asset Quality banking indicators are the, so called, “criteria”, the value of these indicators are the, so called, “scores” in each criterion and the P.R.O.METH.E.E. [Preference Ranking Organization METhod of Enrichment Evaluations, Brans & Vincke (1985)] Multiple Criteria method is applied, towards modelling banking products appraisal problems. A Multiple Criteria process, strictly mathematically defined, integrates the behaviour of each indicator-criterion and utilizes each score in order to rank the so called “alternatives”, i.e. categories of banking products.