Multi Criteria Decision Making for Bank Rating Based on Health Level of Bank

Abstract

The banking industry is vital for the economy of a country. Based on that, the information about the level of health of the banks is required as a reflection of the condition of the bank for all the relevant parties, namely the owners of the bank  (the stakeholders) and bank managers, investors, customers, and the Government/central bank as regulator, supervisor of banks that existed in Indonesia.To make it easier for customers and related parties in knowing the best banks in Indonesia, required system rating is assessed based on the level of health. Health assessment of Risk factors measured by bank Profile, Good Governance, Coorporate, Earning and Capital (RGEC) and methods of promethee. The purpose of this research is to know the order of ranking of the banks resulting from the method of Promethee Method and RGEC, and to know its accurate results from both methods. The data used are of financial statements in the year 2015, released in 2016 from four banks from the bank group has assets above 30 trillion (BUKU4) and 10 banks from the bank group has assets of 5 trillion to 30 trillion (BUKU3). The ranking results using both of these methods are significantly alike. It is because the value of probability with the Friedman test is 64 for BUKU4 and 108900 for BUKU3, both have greater value equal to the critical value table chi-square with the value of the degrees of freedom (DF) 1 and α = 5% i.e. 3.84. It shows the order of rank banks based on the level of health of a bank by using Promethee method RGEC and is accurate.