The inference of this study lies mainly in identifying and prioritizing financial parameters based on which financial institutions are considered efficient. This study attempts to find out the current performance of commercial banks in Nepal and develop a multi criteria model to check the health and status of these banks. This research will explore the Key Performance Indicators based on the Analytic Hierarchy Process and identify how these are affecting a bankâ€™s performance in Nepal. The study reveals the financial positions of three public and ten private commercial banks. The data are mainly obtained from the Central Bank of Nepal annual audited financial statements of commercial banks (published by the respective banks), and a yearly economic survey. An average of four year ratios from 2008/09 to 2011/12 was evaluated to assess the financial performance of the commercial banks. Thirteen commercial banks were selected for the analysis in this study. The financial ratios used to assess bank performance were taken based on the Analytic Hierarchy Process framework in which hierarchical criteria were determined based on CAEL (Capital Adequacy, Asset Quality, Efficiency and Liquidity.
AHP, Bank Performance, Nepal
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