Philippines: Financial Soundness Indicators

The banking sector plays in important role in the country’s economy, acting as an intermediary to all industries. As the banking sector has a major impact on the economy as a whole. Performance evaluation of the banking sector is an effective measure and indicator to check the soundness of economic activities of an economy. Many methods are employed to analyse banking performance. One of the popular methods is the CAMELS framework, developed in the early 1970’s by federal regulators in the USA. The CAMELS rating system is based upon an evaluation of six critical elements of a financial institution’s operations: Capital adequacy, Asset quality, Management soundness, Earnings and profitability, Liquidity, and Sensitivity to market risk. Under this bank is required to enhance capital adequacy, strengthen asset quality, improve management, increase earnings, maintain liquidity, and reduce sensitivity to various financial risks. In the present study an attempt was made to evaluate the performance & financial soundness of NEPAL BANGLADESH BANK LTD using CAMEL approach. Quantitative parameters are computed and updated on a quarterly basis while in respect of the qualitative parameters the ratings / marks given at the time of previous on-site examination

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Financial Soundness of the Company

SSRN Electronic Journal ◽

10.2139/ssrn.1957195 ◽

2009 ◽

Author(s):

Tiago Batista Romão

Keyword(s):

Financial Soundness

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A Study on Testing the Operating Efficiency of Indian Banking Sector with Special Reference to the Select Financial Soundness Indicators — An Empirical Approach

Asia Pacific Business Review ◽

10.1177/097324701100700307 ◽

2011 ◽

Vol 7 (3) ◽

pp. 72-83

Author(s):

M. S. Ramaratnam ◽

R. Jayaraman

Keyword(s):

Special Reference ◽

Banking Sector ◽

Empirical Approach ◽

Operating Efficiency ◽

Financial Soundness

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Measuring the Financial Soundness of U.S. Firms, 1926–2012

10.21034/sr.484 ◽

2013 ◽

Author(s):

Andrew Atkeson ◽

Andrea L. Eisfeldt ◽

Pierre-Olivier Weill

Keyword(s):

Financial Soundness

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ANALISA TINGKAT KESEHATAN KEUANGAN PT. BANK PERKREDITAN RAKYAT (BPR) BATANG PALANGKI

10.31219/osf.io/wupyh ◽

2019 ◽

Author(s):

Shintia Mustika ◽

Doni Marlius

Keyword(s):

Economic Development ◽

Financial Institutions ◽

Historical Data ◽

Financial Health ◽

Financial Reports ◽

Average Value ◽

Capital Assets ◽

Health Level ◽

The Future ◽

Financial Soundness

Bank are financial institutions that play a role in supporting economic development in a region, where the activitiesof raising funds and channeling funds in the form of loans or lending is a from of money circulation to stabilize the economy. The purpose of this study was to conduct an analysis of the level of bank financial health of the PT. Bank Perkreditan Rakyat (BPR) Batang Palangki, for the years 2014-2018. Historical data is taken from bank financial reports that have been published. Analysis of bank financial soundness using the CAMEL method (Capital, Assets, Management, Earning, Liquidity). The results showed that the 2014-2018 PT. BPR Batang Palangki financial health level showed a healthy category, where the average value of the CAR ratio was 28,66%, the KAP ratio was 1,15%, the NPM ratio was 24,88%, the ROA ratio was 3,38%, BOPO ratio of 74,83%, and LDR ratio of 56,30%. It is expected that in the in the future BPR Batang Palangki can continue to maintained according to the provisions that apply.

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Jordan Banks Financial Soundness Indicators

International Journal of Finance & Banking Studies (2147-4486) ◽

10.20525/ijfbs.v4i3.224 ◽

2016 ◽

Vol 4 (3) ◽

pp. 44

Author(s):

Imad Kutum ◽

Khaled Al-Jaberi

Keyword(s):

Financial Crisis ◽

Research Paper ◽

Capital Adequacy ◽

Basel Iii ◽

Financial Indicators ◽

2008 Financial Crisis ◽

Leverage Ratio ◽

General Outcome ◽

Capital Adequacy Ratio ◽

Financial Soundness

<p><em>The aim of this research paper is to examine the Jordanian banks using financial soundness indicators. This is to establish if Jordanian banks were affected because of the 2007/2008 financial crisis and determine the underlying reasons. The research paper was conducted on 25 banks in Jordan listed in the countries securities exchange. The research methodology used consisted of examining the banks financial records in order to derive four crucial Basel III ratio such as the capital adequacy ratio, the leverage ratio, the liquidity ratio and finally the Total Provisions (As % Of Non-Performing Loans) %. The results revealed that out of the four hypotheses under examination Jordan Banks do not meet Basel financial Indicators for Capital Adequacy Ratio, Jordan Banks does not meet Basel financial Indicators for Liquidity Ratio , Jordan Banks do not meet Basel financial Indicators for Leverage Ratio and Jordan Banks do not meet Basel financial Indicators for Total Provisions (As % Of Non-Performing Loans) ratio. Only one hypothesis was accepted based on the research outcomes. The rest of the hypothesis was rejected since the average trend line did not go below the Basel III required ratio level. The general outcome of the research revealed that Jordanian banks were not affected significantly by the financial crisis.</em></p>

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Evaluation and Comparison of Financial Soundness of Islamic and Conventional Private Commercial Banks in Bangladesh: A CAMEL Approach

Canadian Journal of Business and Information Studies ◽

10.34104/cjbis.020.01290140 ◽

2020 ◽

pp. 128-140

Keyword(s):

Quality Management ◽

Stock Exchange ◽

Capital Adequacy ◽

Islamic Banks ◽

Management Quality ◽

Significant Difference ◽

Financial Soundness ◽

Marginal Status ◽

Conventional Banks ◽

Asset Quality

This article evaluates and compares the financial soundness of Islamic and conventional PCBs operating in Bangladesh based on the CAMEL approach over the period 2015 to 2019. For this purpose, the authors select a sample of 17 Conventional PCBs and 6 Islamic PCBs listed on the Dhaka Stock Exchange. In terms of composite CAMEL ratings, none of the banks is found to be strong or satisfactory in financial soundness in 2019. Out of 17 conventional banks, 13 of them are in a fair position i.e. having financial, operational, or compliance weakness and need more than normal supervision and regulation to address the deficiencies. Another 4 conventional banks are in a marginal position means that they are in serious financial problems and need close supervision and regulation. Ranking of conventional banks based on composite CAMEL ratings shows that Brac Bank Ltd. is in top position (Score 2.65) with Bank Asia Ltd. securing second position (score 2.7) while AB Bank Ltd., IFIC Bank Ltd, One Bank Ltd., and Mutual Trust Bank Ltd. are in the worst position with marginal status. Among 6 Islamic banks, 5 are in a fair position and only 1 in a marginal position in 2019. Shahjalal Islami Bank Ltd. secures the top position (Score 2.8) with fair status and Social Islami Bank Ltd. is in the worst position with marginal status. Independent sample test is used to see whether there is any significant difference between Islamic and Conventional PCBs concerning CAMEL parameters. The study finds that except for liquidity there is no significant difference in capital adequacy, asset quality, management quality, and earnings quality. The study also reveals that there is no significant difference in the average CAMEL ratings of two types of Banking. However, on average Islamic banks have better asset quality, management quality while conventional banks have better capital adequacy, earnings, and liquidity.

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