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Applying The Ward Method in the Analysis of Financial Situation of Commercial Banks

Author

Listed:
  • Anna Bieniasz

    (Department of Finance and Accounting, Poznan University of Life Sciences)

  • Anna Majchrzak

    (Department of Finance and Accounting, Poznan University of Life Sciences)

Abstract

The article presents the evaluation of the financial situation of commercial banks in Poland. The ratio analysis shows that the biggest variations between analyzed units were in productivity of tangible fixed assets, share of non-performing loans and overall liquidity. The financial indicators constituted the basis for the process of grouping banks into clusters of similar financial standing. The use of Ward method enabled us to differentiate five clusters. The most profitable banks belong to the first cluster, while the most productive ones are from the fourth cluster. The third cluster comprises the banks with the relatively worst financial situation.

Suggested Citation

  • Anna Bieniasz & Anna Majchrzak, 2011. "Applying The Ward Method in the Analysis of Financial Situation of Commercial Banks," "e-Finanse", University of Information Technology and Management, Institute of Financial Research and Analysis, vol. 7(3), pages 1-12, November.
    • Handle: RePEc:rze:efinan:v:7:y:2011:i:3:p:1-12
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    More about this item

    Keywords

    financial situation; commercial banks; Ward method;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis

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