Contabilidad y marketing

Financial Performance Analysis through CAMEL Rating: A Comparative Study of Selected Private Commercial Banks in Ethiopia

Abstract

Edilawit Gebregiorgies

This study was focused on the area of financial performance analysis of commercial banks by using CAMEL approach in Ethiopian banking industry. The study was conducted on six senior private Ethiopian commercial banks over the period 2010-2014 by collecting data from their annual reports from year 2010 to 2014 and thereby ranked the overall financial performance of the respective banks based on CAMEL model and this study also aimed to investigate the inter connection between CAMEL ratios with profitability, late and early establishment of banks.. The study used quantitative approach from the three methods of conducting business and social research. The finding of this study indicated that, UNB, NIB, and BOA held from 1st to 3rd of the rank based on CAMEL model overall performance. NIB was on top position with capital adequacy ratio parameter, while DAB got lowest rank. Under the asset quality parameter, UNB held the top rank while AIB held the lowest rank. Under management efficiency parameter the top rank has been taken by AIB& BOA and jointly and the lowest rank has been held by WEB. In terms of earning quality parameter, NIB got the top rank and BOA held the second rank & WEB held the third rank. DAB got the last rank. Under the liquidity parameter NIB stood first and DAB held the lowest.