Title: Assessment of reputational risk impact on commercial banks financial performance

Authors: Daiva Jurevičienė; Viktorija Skvarciany; Ksenija Kravec

Addresses: Faculty of Business Management, Department of Economics Engineering, Vilnius Gediminas Technical University, Sauletekio Ave. 11, 10223 Vilnius, Lithuania ' Faculty of Business Management, Department of Economics Engineering, Vilnius Gediminas Technical University, Sauletekio Ave. 11, 10223 Vilnius, Lithuania ' Danske Bank Global Service Lithuania (GSL), Markets CSD, Saltoniskiu Str. 2, 08500 Vilnius, Lithuania

Abstract: The current study aims to determine criteria linked to a bank's reputation and evaluate the effect of reputation on the commercial bank's performance. In order to estimate the impact of reputation on a commercial bank's performance, the expert evaluation method was chosen. The research was conducted in two steps: first, the unstructured (informal) interview was applied to extract the factors; second, the multicriteria decision methods such as simple additive weighting (SAW), complex proportional assessment (COPRAS) and geometric mean were employed for evaluating the determined factors. The research results showed that the weakest position of the commercial bank in terms of reputational risk implied the performance efficiency decrease. The conducted research contribute to the scientific literature by providing a methodology for assessing the impact of reputational risk on commercial bank's performance. However, the methodology could be applied to those banks that do not provide services for individual customers but work with business clients only.

Keywords: reputation; reputational risk; multicriteria decision-making methods (MCDM); SAW; simple additive weighting; COPRAS; complex proportional assessment; banking.

DOI: 10.1504/IJEBR.2021.112001

International Journal of Economics and Business Research, 2021 Vol.21 No.1, pp.62 - 86

Received: 08 Sep 2019
Accepted: 01 Feb 2020

Published online: 27 Nov 2020 *

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