Empirical Evidence on the Impact of Bank-Specific Factors on the Commercial Banks Performance: the CAMEL Model and Case of Ethiopian Banks

Β§ Addis Ababa University Addis Ababa University

Send Message

To: Author

Empirical Evidence on the Impact of Bank-Specific Factors on the Commercial Banks Performance: the CAMEL Model and Case of Ethiopian Banks

Article Fingerprint

ReserarchID

MBRB417R

Empirical Evidence on the Impact of Bank-Specific Factors on the Commercial Banks Performance: the CAMEL Model and Case of Ethiopian Banks Banner

Key Research Insights

Synthesized scholarly intelligence & interactive research assistant
  • English
  • Afrikaans
  • Albanian
  • Amharic
  • Arabic
  • Armenian
  • Azerbaijani
  • Basque
  • Belarusian
  • Bengali
  • Bosnian
  • Bulgarian
  • Catalan
  • Cebuano
  • Chichewa
  • Chinese (Simplified)
  • Chinese (Traditional)
  • Corsican
  • Croatian
  • Czech
  • Danish
  • Dutch
  • Esperanto
  • Estonian
  • Filipino
  • Finnish
  • French
  • Frisian
  • Galician
  • Georgian
  • German
  • Greek
  • Gujarati
  • Haitian Creole
  • Hausa
  • Hawaiian
  • Hebrew
  • Hindi
  • Hmong
  • Hungarian
  • Icelandic
  • Igbo
  • Indonesian
  • Irish
  • Italian
  • Japanese
  • Javanese
  • Kannada
  • Kazakh
  • Khmer
  • Korean
  • Kurdish (Kurmanji)
  • Kyrgyz
  • Lao
  • Latin
  • Latvian
  • Lithuanian
  • Luxembourgish
  • Macedonian
  • Malagasy
  • Malay
  • Malayalam
  • Maltese
  • Maori
  • Marathi
  • Mongolian
  • Myanmar (Burmese)
  • Nepali
  • Norwegian
  • Pashto
  • Persian
  • Polish
  • Portuguese
  • Punjabi
  • Romanian
  • Russian
  • Samoan
  • Scots Gaelic
  • Serbian
  • Sesotho
  • Shona
  • Sindhi
  • Sinhala
  • Slovak
  • Slovenian
  • Somali
  • Spanish
  • Sundanese
  • Swahili
  • Swedish
  • Tajik
  • Tamil
  • Telugu
  • Thai
  • Turkish
  • Ukrainian
  • Urdu
  • Uzbek
  • Vietnamese
  • Welsh
  • Xhosa
  • Yiddish
  • Yoruba
  • Zulu
Reading Preferences
Font Size
Line Spacing
Background
This converted HTML version may contain rendering inconsistencies. Please refer to the PDF for the authoritative version, or click here to provide feedback.

Abstract

The study has investigated one of the key research questions: how do bank specific factors are related to bank performance? The model constructed is framed based on the commonly used supervisory tool to monitor bank performance: CAMEL. This consists of elements from Capital Adequacy, Asset Quality, Management, Earning and Liquidity. It has used six variables representing each of the components and run a regression model based on fixed and random models. The outcome shows that many of the bank specific factors have a significant statistical relationship with performance measures. Despite the mixed result in the various models, the study explored that bank’s capital holding, asset quality and business diversification, cost control and liquidity positions are important part of the management decisions to have a significant influence on performances.

References

26 Cites in Article
  1. 1. Franklin Allen,Elena Carletti (2008). Mark-to-market accounting and liquidity pricing. Journal of Accounting and Economics, 45(2-3), 358-378.
  2. 2. Amer Al-Roubaie,Adel M. Sarea (2010). Green Investment and Sustainable Development: The Case of Islamic Finance. Journal of Islamic Business and Management (JIBM), 09(01)
  3. 3. Yener Altunbas,Lynne Evans,Philip Molyneux (2001). Bank Ownership and Efficiency. Journal of Money, Credit and Banking, 33(4), 926.
  4. 4. Y Altunbaş,E Gardener,P Molyneux,B Moore (2001). Efficiency in European banking. European Economic Review, 45(10), 1931-1955.
  5. 5. Allen Berger,Christa Bouwman (2009). Bank Liquidity Creation. Review of Financial Studies, 22(9), 3779-3837.
  6. 6. A Berger (1995). The profit-structure relationship in banking, Tests of market-power and efficientstructure hypotheses. Journal of Money, Credit and Banking, 27(2), 404-431.
  7. 7. P Bourke (1989). Concentration and Other Determinants of Bank Profitability in Europe, North America and Australia. Journal of Banking and Finance, 13, 65-79.
  8. 8. U Dang (2011). The CAMEL Rating System in Banking Supervision: a Case Study of Arcada University of Applied Sciences. The CAMEL Rating System in Banking Supervision: a Case Study of Arcada University of Applied Sciences
  9. 9. A Demirguc-Kunt,H Huizinga (1999). Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence. The World Bank Economic Review, 13(2), 379-408.
  10. 10. Douglas Diamond (2000). Financial Intermediation and Delegated Monitoring. The Review of Economic Studies, 51(3), 393.
  11. 11. D Gujarati,D Porter (2009). Basic Econometrics. Basic Econometrics
  12. 12. M Kumbirai,R Webb (2010). A financial Ratio Analysis of Commercial Bank Performance in South Africa. African Review of Economics and Finance, 2(1), 30-54.
  13. 13. Haithm Al-Sabri,Norhafiza Nordin,Hanita Shahar (2009). The impact of chief executive officer (CEO) and deal characteristics on mergers and acquisitions (M&A) duration: A quantile regression evidence from an emerging market. Asian Academy of Management Journal of Accounting and Finance, 18(1), 101-132.
  14. 14. Hong Liu,John Wilson (2010). The profitability of banks in Japan. Applied Financial Economics, 20(24), 1851-1866.
  15. 15. Frederic Mishkin (2001). Money and Banking.
  16. 16. D Nachane,Saibal Ghosh (2007). An Empirical Analysis of the Off-Balance Sheet Activities of Indian Banks. Journal of Emerging Market Finance, 6(1), 39-59.
  17. 17. Garoui Nassreddine,Jarboui Anis (2013). Advanced Study on Stakeholder Approach, Stakeholders Mental Model: A Visualization Test with Cognitive Mapping Technique. Insights into Economics and Management Vol. 7, 2, 36-54.
  18. 18. Unknown Title. National Bank of Ethiopia various Directives
  19. 19. V Ongore (2011). Determinants of financial performance of commercial banks in Kenya. International Journal of Economics and Financial Issues, 3(1), 237-252.
  20. 20. Aisyah Rahman,Abdul,Ibrahim Mansor,Ahamad Meera,Kameel Mydin (2009). Lending Structure and Bank Insolvency Risk: A Comparative Study between Islamic and Conventional Banks. Journal of Business & Policy Research, 4(2), 189-211.
  21. 21. E Rogers (1998). Nontraditional activities and the efficiency of US commercial banks. Journal of Banking & Finance, 22(4), 467-482.
  22. 22. P Rose,S Hudgins (2010). Scaling-Up SME Access to Financial Services. Scaling-Up SME Access to Financial Services
  23. 23. J Rosse,J Panzar (1977). Chamberlin vs. Robinson, an Empirical Test for Monopoly. Chamberlin vs. Robinson, an Empirical Test for Monopoly
  24. 24. R Said,M Tumin (2011). Performance and Financial Ratios of Commercial Banks in Malaysia and China. International Review of Business Research Papers, 7(2), 157-169.
  25. 25. Abdus Samad (2004). β€œIs there any Causality between the Islamic Banks’ Deposit Returns and the Conventional Banks’ Interest Rates? Evidence from Malaysian Commercial Banking”. International Journal of Economics and Financial Issues, 12(3), 18-28.
  26. 26. (1994). Addendum. Journal of Money, Credit and Banking, 26(1), 168.

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Tesfaye Boru Lelissa. 2018. "Empirical Evidence on the Impact of Bank-Specific Factors on the Commercial Banks Performance: the CAMEL Model and Case of Ethiopian Banks". Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 18 (GJMBR Volume 18 Issue C5).

Download Citation

Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords
Classification
GJMBR-C Classification JEL Code: G21
Version of record

v1.2

Issue date
August 6, 2018

Language
English
Order Article Reprint
Experiance in AR

Explore published articles in an immersive Augmented Reality environment. Our platform converts research papers into interactive 3D books, allowing readers to view and interact with content using AR and VR compatible devices.

Read in 3D

Your published article is automatically converted into a realistic 3D book. Flip through pages and read research papers in a more engaging and interactive format.

Article Matrices
Total Views: 1.5K
Total Downloads: 83
All Trends

Request Access

Please fill out the form below to request access to this research paper. Your request will be reviewed by the editorial or author team.
X

This is the heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.

High-quality academic research articles on global topics and journals.

Empirical Evidence on the Impact of Bank-Specific Factors on the Commercial Banks Performance: the CAMEL Model and Case of Ethiopian Banks

Tesfaye Lelissa
Tesfaye Lelissa Addis Ababa University