Financial strength as a performance indicator for competitiveness

Competitiveness is a dynamic concept, which is expressed as the ability of firms to react to changing economic and technological conditions. The competitiveness of a firm is usually reflected in its superiority in production resources and performance outcomes. Not only that, the managerial capabilities, innovativeness, customer relationship marketing, long term planning are also needed to sustain in the market and to gain edge over them. Banks are, therefore, forced to develop management strategies that ensure a quick reaction to market and product changes. This has made the banks to shift the available capital to the most profitable transactions in order to gain financial strength and customer value. It is, therefore necessary for banks to calculate the financial position accurately. The motive of the study is to find out the financial strength as an indicator for measuring competitiveness.

Financial measures as performance indicators of financial institutions, have received increased attention over the past several years.