Bank Financial Statement Management using a Goal Programming Model

Halim, Bushra Abdul; Karim, Hilwana Abd; Fahami, Norasyikin Abdullah; Mahad, Nor Faradilah; Nordin, Sayed Kushairi Sayed; Hassan, Nasruddin

doi:10.1016/j.sbspro.2015.11.066

Cited by 24 publications

(16 citation statements)

References 8 publications

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“…Goal programming optimally allocated the assets to achieve the target goals, namely Other Income, Deposits, Investments, and Advances. Halim et al (2015)applied the GP model to attain six goals: asset accumulation, liability reduction, equity wealth, earning, profitability, and optimum management of a bank in Malaysia. The proposed model is capable of supporting financial decision making while dealing with diverse economic scenarios.…”

Section: Introductionmentioning

confidence: 99%

Mathematical Modeling of Asset Liability Management in Banks Using Goal Programming and Ahp

Tanwar¹,

Vaish²,

Rao³

2020

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Asset Liability Management has gained popularity in the banking sector. Earlier banks focused on asset allocation, but now the management of assets and liabilities is equally essential. Asset liability management targets the optimum distribution of funds in assets and managing liabilities so that banks can earn higher profits and minimize risk. In this paper, the optimization of assets and liabilities of Indian banks has been concentrated using mathematical models. Combining the Analytical Hierarchy Process (AHP) and Goal Programming (GP) model has been used to solve the optimization problem. AHP is a multi-criteria decision-making approach for deriving priority weights. Goal Programming is a linear programming model to solve complex issues having multiple objectives. In this paper, the primary data gathered from Bank senior managers have been analyzed using the AHP approach to derive weights for criteria. These weights are assigned to goals in goal programming to prioritize the goals. Secondary data on OBC bank is used in goal programming from 2010-2019 collected from OBC bank's annual reports and RBI websites. The findings show that OBC bank has the scope of improving its assets and liabilities position to increase its profit and minimize the risk. The model generates an optimum balance sheet that achieves the set goals and satisfies all the statutory and planning constraints. The same model can be useful for scheduled commercial banks in India with modifications concerning banks' targets and controls. The model developed in this paper is helpful for bank managers in planning and forecasting. AHP and GP's combined approach is unique in this paper, which uses experts' knowledge and applies it in the model. The model is created on the bank's realistic goals and constraints after carefully considering the issues faced by bank officials. The paper is limited to the Indian Banking system as other countries have different balance sheet structures and constraints.

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Section: Introductionmentioning

confidence: 99%

Mathematical Modeling of Asset Liability Management in Banks Using Goal Programming and Ahp

Tanwar¹,

Vaish²,

Rao³

2020

ijfb

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“…Financial management is essential for every company in order to support the quality and quantity of assets as well as taking into account of the company's liability for future planning [1]. For banking sectors, it is important to optimize the profit while minimizing risks that bring about severe losses to the bank [2]. Asset and liabilities management is defined as planning of asset and liability while considering multiple bank management objectives such as reducing risk and enhance liquidity of the bank [3].…”

Section: Introductionmentioning

confidence: 99%

“…Some common goals such as asset accumulation, liability reduction, profitability and optimum management items in the financial statement are the main concern in an organization such as bank and financial institution [2]. In this study, the financial statement in the annual There are studies done on the bank's financial management by using mathematical model.…”

Section: Introductionmentioning

confidence: 99%

“…A mathematical model is designed to determine the optimum management of asset and liabilities of the bank [1,9]. GP model is developed for generating the optimal solution for six goals which are asset accumulation, liability reduction, equity wealth, earning, profitability as well as optimum management items [2]. Besides that, the financial statement of United Bank of Africa (UBA) is studied using GP model [10].…”

Section: Introductionmentioning

confidence: 99%

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Optimization on the financial management of the bank with goal programming model

Chen

Siew

Lam

2018

J. Fundam and Appl Sci.

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Financial management is crucial for planning bank's asset and liabilities while taking consideration for multiple objectives. The objective Programming (GP) model to optimize the financial management of Public Bank Berhad in Malaysia. Six goals from the financial statements profit, earning and optimum management items are 2015. The results of this study indicate that all six goals are fully achieved by using the GP model. This study is significant because it helps to develop a mathematical model to examine the financial strengths of Public Bank Berhad in Malaysia. Besides that, the potential improvement on liability, equity, profit, earning and optimum management item of Public Bank Berhadcan be identified in this study based on the deviation from the target value.

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“…Pada penelitian tersebut menggunakan model Program Linear Tujuan Ganda dengan prioritas disertai bobot. Berbeda dengan Halim dkk., pada tahun 2015[11] yang dalam penelitiannya menggunakan model Program Linear Tujuan Ganda untuk perencanaan manajemen laporan keuangan suatu Bank. Pada penelitiannya, ada enam Goal yang ingin dicapai yaitu, memaksimalkan total aset, meminimalkan hutang, memaksimalkan kekayaan ekuitas, memaksimalkan total pendapatan, memaksimalkan keuntungan, dan memaksimalkan proporsi nilai barang pada laporan keuangan.…”

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Optimization of CV.Amanda Makassar Production Planning in the Time of Covid-19 Using Multiple Goal Linear Program Model

Aksan¹,

Rangkuti²,

Ribal³

2020

JMSK

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A research has been conducted on the use of multiple-goal linear program model to solve multi goals by taking the case of optimization of production planning at CV. Amanda Makassar during the Covid-19 period. In this research, four goals were formulated, that were (i) the fulfillment of the number of market demand, (ii) maximizing income, (iii) minimizing production costs, and (iv) maximizing working hours. Then for the optimal solution using LINGO 18 software. Based on the research results, the optimal production plan during the Covid-19 period resulted from the two different models for original brownies products where the results of the dual-purpose linear program model without target priority produced 16.118 original brownies and 32.400 packages from the dual-purpose linear program model with priority target with weight. For cream cheese brownies, there are 3.000 packages, 18.000 packages of sarikaya pandan brownies, 3.600 packs of choco marble brownies, pink marble brownies, tiramishu marble brownies, roasted brownies, and 1.800 packs of cappuccino marble brownies. Chocolate bananas bolen, pineapple molen, and chocolate ganache in 840 packages. Then for 15.000 packs of blueberry brownies, 960 packs of strawberry brownies, 360 packs of dry brownies, 2.400 banana cheese brownies, 300 packs of cheese bananas bolen, 600 packs of peanut butter, and 9.000 packs of pandan cake for a month. The maximum revenue obtained by the company with a multiple-purpose linear program model without target priority is Rp.628.602.000.- and the minimum production cost that the company must pay is Rp.495,048,300,-. Then for the multiple-purpose linear program model with target priority accompanied by a weight of Rp.4.299.480.000.- and the minimum production cost is Rp.3.394.366.000. The result shows that optimization using a multiple goal linear program model with goal priority provide optimal production which results in greater profit compared to the process (optimization) carried out by the company so far, which is only based on the number of demand.

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Bank Financial Statement Management using a Goal Programming Model

Cited by 24 publications

References 8 publications

Mathematical Modeling of Asset Liability Management in Banks Using Goal Programming and Ahp

Mathematical Modeling of Asset Liability Management in Banks Using Goal Programming and Ahp

Optimization on the financial management of the bank with goal programming model

Optimization of CV.Amanda Makassar Production Planning in the Time of Covid-19 Using Multiple Goal Linear Program Model

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