Evaluating Performance Of Commercial Bank Outlets Based On Fuzzy Clustering Method

Outlets are the basis of commercial bank and the focus of bank management. The thesis reviews and analyzes the study course of performance evaluation of domestic and foreign banks. It finds that most of domestic scholars just researched total performance of commercial banks. But few of them involved the performance of bank outlets. Thus, building the performance evaluation system of commercial bank outlets and studying on performance methods are helpful for bank management and raising the efficiency of incentive mechanism.Based on the survey of ICBC in two cities in Zhejiang Province, the thesis investigates and summarizes the Practical Appraisal Method (PAM) applied in outlets. It considers that the method shows too much personal views .Moreover, service index, system construction index, cultural atmosphere index of bank outlets are difficult to evaluate. The result made by the method is just the performance rankings of outlets based on score gave by experts. So it is difficult for the method to fully reflect management and efforts of outlets. In view of these deficiencies, the thesis introduces Fuzzy Clustering Method (FCM) which establishes five performance estimation indexes of outlets. The indexes are balance of deposits, average growth rate for deposits, gaps between balance of deposits and break-even point, per capita profit, fixed cost margin. In the course of empirical studies, the thesis takes the basis of FCM and goes with Transformation Matrix, Decision Tree to roundly evaluate the performance of outlets. Firstly, according to five estimation indexes, all bank outlets we observed are classified by FCM. Secondly, the thesis validates the classification result rational or not by Transformation Matrix. Thirdly, some Decision Trees are constructed based on the classification results. Then the thesis uses these Decision Trees to analyze those results and discover some rules of classified data. In a word, the results created by FCM are relative and Objective. Thus the border among the bank outlets become a zone instead of a line, and make it more vaguely and probability, finally we will get more reasonable results. According to the results made by FCM, inferior supervisors can integrate and allocate the limit resource of outlets in the district. Managers can consider to merger those poor outlets into approaching excellent outlets, even revocation it. Conversely, the inferior managers should reward those excellent outlets. Certainly, the leaders should also check them whether they should make some improvement on performance.With the data from 2004 to 2006 of bank outlets of ICBC in two cities in Zhejiang Province, the thesis gets the probabilities of different outlets belonging to different sorts in empirical result made by FCM. Otherwise, it gets over the defect of absolute performance ranking made by PAM and provides corresponding measures to different sorts. Compared with the existing total performance evaluation methods and PAM, FCM has been proved that it is relatively consistent with the reality of grass-roots management.