scholarly journals Use of CAMEL Rating Framework: A Comparative Performance Evaluation of Selected Bangladeshi Private Commercial Banks

2017 ◽  
Vol 10 (1) ◽  
pp. 120 ◽  
Author(s):  
Md. Zahidur Rahman ◽  
Md. Shohidul Islam
Keyword(s):  
Performance Evaluation ◽  
Commercial Banks ◽  
Financial Stability ◽  
Banking Sector ◽  
Study Data ◽  
Financial Statement ◽  
Rating System ◽  
Annual Reports ◽  
Continuous Performance ◽  
Comparative Performance

The Banking sector in Bangladesh is one of the fast growing sectors and considered as an integral part of the economy. Hence, monitoring, supervision and continuous performance evaluation of the banking sector is compulsory to ensure the financial stability of the economy since the banking sector is becoming more complex than before. The present study is an attempt to evaluate and compare the performance of the banking sector in Bangladesh. One of the most effective supervisory techniques, CAMELS rating system (basically a quantitative technique) has been used to rank the banks based on their performances. In this study, seventeen conventional private commercial banks have been chosen as samples to meet the purpose of the study. Data for analysis has been collected from the banks’ annual reports for the period (2010-2016). The result from this comparative analysis shows that Eastern Bank has stood at the top position among all the selected banks based on CAMEL rating system. However, the findings from this paper will definitely help the researchers and analysts to understand financial statement analysis in a depth manner and also provide a uniform basis for identifying those institutions requiring special supervisory attention.

scholarly journals Benchmarking and Rating of Private Commercial Banks of Bangladesh Through CAMELS Components

2020 ◽  
Vol 2 (2) ◽  
pp. 40-49
Author(s):  
A H M Ziaul Haq ◽  
Hosnay Nasrin
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Banking Sector ◽  
Study Data ◽  
Annual Reports ◽  
Continuous Performance ◽  
Financial Failure ◽  
Strong Position ◽  
Composite Rating

The banking sector of Bangladesh is becoming more complicated than before. Ensuring the financial stability of the economy, monitoring, supervision, and continuous performance evaluation of the banking sector are compulsory. The present study, therefore, is an attempt to evaluate and compare the performance of our banks. One of the most effective supervisory techniques, CAMELS rating system has been used to benchmark and rate the banks based on their performance. In this study, 21 private commercial banks (PCBs) have been chosen as samples to meet the purpose of the study. Data for analysis has been collected from the banks’ annual reports for the period of 2008 to 2018. The result shows that none of the banks could achieve a 'strong' position, and only SEBL was able to secure a ‘satisfactory’ mark. Unfortunately, AB bank was rated "marginal" in the composite rating, which is the lowest rating among the sample banks. Hence, AB bank needs to develop reform and follow-up programs as soon as possible to avoid financial failure.

scholarly journals Comparative Performance Evaluation of Selected Commercial Banks in India using CAMELS Rating Model

2018 ◽  
Vol 2 (1) ◽  
pp. 24 ◽  
Author(s):  
Elizabeth M. Samuel
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Global Market ◽  
Capital Adequacy ◽  
Annual Reports ◽  
Comparative Performance ◽  
Earning Capacity ◽  
Management Efficiency ◽  
Asset Quality ◽  
Rating Model

Sound financial health of a bank is the guarantee not only to its depositors but is equally significant for the shareholders, employees and whole economy as well. As sequel to this maxim, efforts have been made from time to time to measure the financial position of each bank and manage it efficiently and effectively.Indian banking sector widely includes commercial, nationalized, co-operative, private and international banks in its fold. In the present study an attempt is made to evaluate the financial performance of three major commercial banks (IOB, Canara Bank and Syndicate Bank) using CAMELS Rating Model. CAMELS rating model is basically an approach widely used to measure the performance of banking unit inside and outside India. This model measures the performance of banks from all important parameters like Capital adequacy, Asset quality, Management efficiency, Earning quality, Liquidity and sensitivity to market. The study is based on secondary data drawn from the annual reports. For the purpose of evaluation the data’s of five years (2011-2016) before demonetization are analyzed by calculating the 17 ratios related to CAMELS rating model. It is found out that according to Basel Norm the overall state of capital adequacy of all the three banks are satisfactory. As far as loan portfolio is concern, the overall state of asset quality and management efficiency are satisfactory, whereas the earning capacity of the banks is not and the liquidity is also not satisfactory. The high level of NPAs and sluggishness in the domestic growth, slow recovery in the global economy and the continuing uncertainty in the global market leading to lower exports and imports are one of the main reasons for the low earning capacity of banks along with these reasons RBI’s new rules to make higher provisioning for substandard assets also affected the earning capacity of all the three banks. Based on the evaluations all the three commercial banks should improve its earning capacity and the liquidity position to perform efficiently and effectively.

scholarly journals Impact of Financial Ratios on Stock Price: Evidence from Indian Listed Banks on NSE

2021 ◽  
Vol 11 (4) ◽  
pp. 5132-5144
Author(s):  
Nitish Rane ◽  
Pooja Gupta
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Banking Sector ◽  
Study Data ◽  
Capital Adequacy ◽  
Financial Ratios ◽  
Annual Reports ◽  
Earnings Per Share ◽  
Net Interest Margin ◽  
The Impact

This study aims to examine the impact of financial ratios on the stock prices of companies listed on NIFTY Bank. Nifty Bank is a sub-index of NIFTY 50 and has various listed banks included based on the criteria given by NSE. This study data has been taken from the period 2010-2019 and taken from the company annual reports. The analysis is done using panel data regression and other tests to verify the best model for the dataset. The results obtained from this study show that the capital adequacy ratio and the dividend payout ratio do not impact the stock price. In contrast, earnings per share, net NPA ratio, and basic earnings per share, net profit margin, and net interest margin exhibited a relationship with the stock price. In the Indian context, there is less research available on this topic, and the idea chosen for the study is original. Along with this, the data collected for the study and the code used for analysis is original work. New investors can use the results of this study in the Indian stock market to analyze a stock and take proper investment decisions. Another practical usage of this study is that banking sector companies can improve their ratios to attract new investors.

scholarly journals Analysis of Pre and Post Merger and Acquisition Financial Performance of Banks in Pakistan

2014 ◽  
Vol 6 (4) ◽  
pp. 177-190
Author(s):  
Qamar Abbas ◽  
Rashid Saeed . ◽  
Ehsan-Ul-Hassan . ◽  
Muhammad Shahzad Ijaz .
Keyword(s):  
Financial Performance ◽  
Banking Sector ◽  
Merger And Acquisition ◽  
Business Environment ◽  
Study Data ◽  
Financial Statement ◽  
Acquisition Performance ◽  
Significant Difference ◽  
Insignificant Difference ◽  
The Impact

Merger and Acquisition is a strategy adopted by the organizations globally to meet the needs of dynamic business environment. This strategy also has much importance in Pakistan mostly in banking sector. Therefore, the objective of the study is to assess the impact of M&A on the financial performance of banks in Pakistan. The accounting and financial data of 10 banks were used in this study. Data was taken from the financial statement analysis (FSA) by State Bank of Pakistan from the period of 20062011. For the analysis of pre and post Merger and Acquisition performance 15 financial ratios were used in the study. To compare the results Paired sample t-Test was used to measure the significant difference between pre and post M&A financial performance. The overall results show that there is no significant difference in financial performance. It is concluded that there is insignificant difference between pre and post M&A performance of banks in Pakistan.

scholarly journals Revenue Diversification, Risk and Bank Performance of Vietnamese Commercial Banks

2019 ◽  
Vol 12 (3) ◽  
pp. 138 ◽  
Author(s):  
Ngoc Nguyen
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Banking System ◽  
Transformation Model ◽  
Annual Reports ◽  
Bank Performance ◽  
Method Of Moment ◽  
Revenue Diversification ◽  
Interest Income ◽  
Using Data

In the future, when the process of economic integration in the banking sector is more powerful, and competitive, diversifying revenue is an inevitable and objective trend to help the banks increase profits, minimize risks and improve their competitive position in the system. The research is on the relationship between revenue diversification, risk and bank performance using data from audited financial statements and annual reports of 26 commercial banks listed and unlisted in Vietnam during the period 2010–2018. The research method uses Generalized Method of Moment (GMM) modeling techniques to solve endogenous problems, variance and autocorrelation in the research model. Research results show that diversification negatively impacts profitability and the higher the diversification, the higher the risk of commercial banks. However, the more diversified listed banks, the more increased the bank’s stability. The banks show the weakness and lack of experience of the banking system in developing a reasonable profit transformation model. The revenue diversification of banks is currently passive and moves slowly. Interest income is still the motivation of bank development, boosting profit growth. Growth, as well as the contribution from service activities, is not commensurate with potentials; although there are many positive points, they are not enough to cover risks from net interest income activities.

scholarly journals The Determinants of Bank Profitability Empirical Evidence from Vietnamese Commercial Banks in The Periods Of 2013 To 2018

2020 ◽  
Vol 15 ◽  
pp. 176-184
Author(s):  
Dan Ngoc Minh Nguyen ◽  
Anh Vu
Keyword(s):  
Commercial Banks ◽  
Quantitative Methods ◽  
Stock Exchange ◽  
Balance Sheet ◽  
Secondary Data ◽  
Analysis Data ◽  
Financial Statement ◽  
Annual Reports ◽  
Panel Model ◽  
Data Tables

This research concentrates on the determinants of the profitability of the Vietnamese Commercial Banks. Both internal and external variables regarding the profitability of commercial bank sector will be focused in the analysis. Data over the period of 2013 to 2018 for 29 Vietnamese Commercial Banks[i] is obtained from via Stock Exchange or media. Fixed effect panel model are used to analyze the determinants of the profitability. By using this, we ensure for the effectiveness of the test result in terms of hypothesis along with size in order to get consistent results. The research is based on the scientific approach of quantitative methods to solve the problems posed, practical and effective service for the completion of the research purpose. The secondary data collected from the worldbank.org, vietdata.vn and annual reports (financial statement, balance sheet, etc.) of Vietnamese commercial banks in the 2013-2018 period to create asymmetric data tables will be processed on STATA software.

scholarly journals FAKTOR YANG MEMPENGARUHI KECURANGAN LAPORAN KEUANGAN DENGAN PERSPEKTIF FRAUD TRIANGLE (Studi Empiris pada Perusahaan Property, Real Estate dan Building Construction)

2019 ◽  
Vol 11 (2) ◽  
pp. 137-147
Author(s):  
Yohannes Suharsana ◽  
Chatarina Prisiena
Keyword(s):  
Real Estate ◽  
Financial Stability ◽  
Stock Exchange ◽  
Secondary Data ◽  
External Pressure ◽  
Financial Statement ◽  
Annual Reports ◽  
Variable Pressure ◽  
Fraud Triangle ◽  
Statistical Research

This research is to analyzed influence of variable pressure which proxied by financial stability,external pressure, and financial target, and then variable opportunity which proxied by nature ofindustry, ineffective monitoring, and variable razionalization which proxied by auditor change withfraudulent financial statement which measured with fraud score model (F-Score).The sample used in this research are 26 companies of property, real estate, and buildingconstruction sector that listed in Indonesian Stock Exchange on the period 2011 to 2015. The type datathat used are secondary data, from the annual reports of companies sample.The result of this statistical research showed that the variables of financial stability thatmeasured with change in total asset ratio, financial target variable that measured with ROA (return onassets), and nature of industry variable that measured with the change in receivables ratio has positiveinfluence on the fraudulent financial statement. The research does not prove that external pressurevariable which measured with leverage ratio, ineffective monitoring variable which measured with thepercentage of board members who are outside members, and change auditor which measure withdummy variable has an influence on the fraudulent financial statement.

scholarly journals Financial and Non-Financial Measures in Evaluating Performance: The Role of Strategic Intelligence in the Context of Commercial Banks in Kenya

2020 ◽  
Vol 13 (10) ◽  
pp. 130
Author(s):  
Blandina Walowe Kori ◽  
Stephen M. A. Muathe ◽  
Samuel Mwangi Maina
Keyword(s):  
Balanced Scorecard ◽  
Commercial Banks ◽  
Banking Sector ◽  
Secondary Data ◽  
Annual Reports ◽  
Primary Data ◽  
Balanced Score Card ◽  
Financial Measures ◽  
Strategic Intelligence

This study provides comprehensive discussion on role of strategic intelligence in commercial banks, in Kenyan context. The primary focus was to evaluate the performance of commercial banks using both financial and non-financial performance measurers. The financial measurers comprised return on equity (ROE), while non-financial measures were customer satisfaction, learning and growth, and internal processes. The study was anchored on resource-based view and balanced scorecard model. The target population comprised 40 commercial banks. Additionally, the sample size 181 was selected proportionately through stratified sampling procedure. Data collection instruments comprised closed and open -ended questionnaires and online review. The study used both primary and secondary data, where primary data was obtained from Kenya commercial banks head offices, while secondary data, for the year 2016 – 2018, was obtained from the annual reports of the central bank of Kenya. Data analysis was done using descriptive statistics and linear multiple regression analysis. Findings of the study indicate that strategic intelligence has a statistically significance on the performance of commercial banks in Kenya. Moreover, both financial and non-financial measures of performance are relevant in the banking sector and growth of Kenyan economy. The study recommends that commercial bank in Kenya should integrate their training focus and strategy implementation with investors interests based on balanced score card.

scholarly journals Investigating the Market Interest Rate on Commercial Banks Financial Performance in Bangladesh

2021 ◽  
Vol 5 (1) ◽  
pp. 3-12
Author(s):  
Debashis Saha ◽  
Prodip Chandra Bishwas ◽  
Md. Mustofa Ahmed Sumon
Keyword(s):  
Interest Rate ◽  
Financial Performance ◽  
Commercial Banks ◽  
Financial Stability ◽  
Banking Sector ◽  
Time Series Data ◽  
Positive Impact ◽  
Series Data ◽  
Market Interest Rate ◽  
The Relationship

The banking sector is the most vital partner of development for countries' economies. It has a remarkable contribution to the country's Gross Domestic Product. This study investigates the relationship between the market interest rate and commercial banks' financial performance. As Bangladesh's banking industry is growing, it is vital to maintain a more robust profitability level for its financial stability and soundness. Banks have some determinants that have a significant impact on their performance. The convenience sampling method is used to select the targeted sample. The study includes the time series data of eight years of fifteen commercial banks listed on the Dhaka Stock Exchange in Bangladesh. Multiple variable linear regression and correlation analysis are performed to examine the relationship of market interest rate with banks' profitability with statistical software, IBM SPSS version 25, and Microsoft excel. The study explored that the market interest rate has a significant positive impact on banks' profitability. It is also found that the lending rate and interest rate spread are significantly correlated with the banks' financial performance. The study recommended that banks make their investment to make a higher profit margin to enhance their management and financial soundness efficiency.

scholarly journals Construction and Empirical Research on the Dynamic Provisioning Model of China’s Banking Sector under the Macro-Prudential Framework

2020 ◽  
Vol 12 (20) ◽  
pp. 8527
Author(s):  
Xiaofeng Hui ◽  
Aoran Zhang
Keyword(s):  
Commercial Banks ◽  
Financial Stability ◽  
Banking Sector ◽  
Contingent Claims ◽  
Gaussian Copula ◽  
Accounting System ◽  
Financial Industry ◽  
Claims Analysis ◽  
Contingent Claims Analysis ◽  
Dynamic Provisioning

Since the international financial crisis in 2008, to achieve the political goal of financial stability, academic circles, financial industry, and regulatory authorities worldwide have deeply reflected on the current economic regulatory theories and policy adjustment tools through introducing the macroprudential policy. The dynamic provisioning system is a counter-cyclical policy tool in the macro-prudential adjustment framework widely used in the world. This paper uses the binary Gaussian Copula function to combine the measurement method of the default distance in the contingent claims analysis method with the risk warning idea based on the Probit model and proposes the contingent claims analysis (CCA)–Probit–Copula dynamic provisioning model based on nine forward-looking indicators. Based on China’s actual conditions, this model solves present problems faced by the current dynamic provisioning system in China, such as insufficient historical credit data reserves of commercial banks, excessive reliance on subjective judgments, and conflicts with the current accounting system. Moreover, this model can put forward corresponding counter-cyclical provisioning requirements according to the influence degree of macro-cyclical factors to different commercial banks’ own default risk, which not only takes into account the security and liquidity of commercial banks, but also ensures their profitability and competitiveness. Based on the empirical test of historical data from listed commercial banks in China, it proves that the dynamic provisioning requirements proposed in this model can effectively adjust the overall credit scale of the banking industry in counter-cyclical ways, thereby achieving the policy goals of counter-cyclical adjustment under the macro-prudential framework and maintaining the security of China’s financial system and the sustainable development of the macroeconomy.

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