Analysis of Financial Performance of Nepalese Commercial Banks using CAMEL Approach

Sah, Gunja Kumari; Pokharel, Shiva Prasad

doi:10.3126/cognition.v5i1.55405

Cited by 4 publications

(1 citation statement)

References 13 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Furthermore, these mechanisms play a crucial role in minimizing the risks faced by depositors during times of financial distress. However, it is important to recognize that achieving these objectives may have consequences for the banking sector [16][17][18][19][20] The main objective of this study is to empirically investigate the complex relationship between the evaluation of bank supervision using the CAMEL process and its impact on the growth rate of commercial bank loans in Cambodia. To achieve this, the study employs three distinct panel models: Pooled Ordinary Least Square (OLS) or Pooled OLS, Random Effect (RE), and Fixed Effect (FE) models.…”

Section: Introductionmentioning

confidence: 99%

Empirical Analysis of Commercial Banks' Loans in Cambodia: Panel Data Models

Lim

2023

AJEBA

View full text Add to dashboard Cite

The aim of this research is to employ three distinct panel models, specifically Pooled OLS, Fixed Effect, and Random Effect models, in order to investigate the impact of the five components of banks' risk rating, referred to as CAMEL, on the loan growth rate of commercial banks. The measurement of these components included the equity to asset ratio for capital adequacy (C), the non-performing loan to loan ratio for asset quality (A), the operating expense to asset ratio for management capability (M), the return on asset for earning quality (E), and the liquid asset to asset ratio for liquidity (L). Furthermore, each model took into account two macroeconomic indicators, specifically the real GDP growth and the growth rate of money supply measured by broad money (M2), as control variables. Over a span of 12 years, from 2011 to 2022, a total of 22 commercial banks were carefully chosen. The results of the Fixed Effect test suggest that the FE model is more suitable when compared to the Pooled OLS model. However, the Hausman test indicates that the RE model is more appropriate than the FE model. The findings of this study revealed that the quality of assets played a highly significant role in determining the rate of loan growth. The slope coefficient in all three models was found to be statistically significant at a 5% level. Additionally, the management capability and earning quality were also found to have a statistically significant impact on the loan growth rate. Furthermore, the growth rate of real GDP was found to statistically influence the loan growth rate, whereas the impact of broad money on the loan growth rate was found to be statistically insignificant.

show abstract

Section: Introductionmentioning

confidence: 99%

Empirical Analysis of Commercial Banks' Loans in Cambodia: Panel Data Models

Lim

2023

AJEBA

View full text Add to dashboard Cite

show abstract

Türkiye’deki Kalkınma ve Yatırım Bankalarının Performanslarının CAMELS Analiz Yöntemiyle Değerlendirilmesi: Covid-19 Pandemi Öncesi Dönem ve Pandemi Döneminin Karşılaştırılması

Seyhan

2024

beta

View full text Add to dashboard Cite

Türkiye gibi gelişmekte olan ülkelerde kalkınma ve yatırım bankaları yabancı sermayenin ülkeye girişini kolaylaştırmak, uygulamasına karar verilen projelere teknik destek vermek ve ülke ekonomisinin büyümesi için yatırımcılara kaynak sağlamak amacıyla kurulmaktadırlar. CAMELS analizi, finansal yönden problemleri olan bankaların risklerini önceden tespit etmek, performanslarını ölçmek, finansal krizlerin öncü göstergelerini belirlemek ve ekonomik kriz ya da durgunluk dönemlerinde gerekli önlemler almak amacıyla kullanılan ve uluslararası ekonomik birimler tarafından kabul görülen bir yöntemdir. Bu çalışmanın amacı, Türkiye’de faaliyet gösteren kalkınma ve yatırım bankalarının Covid-19 pandemi öncesi dönem ve pandemi dönemi verilerini CAMELS analiz yöntemi kullanılarak mali performanslarını ölçmek ve karşılaştırmaktır. Analiz sonucunda bankaların büyük çoğunluğunun Covid-19 pandemi öncesi dönemde mali performansları artış eğilimindedir. Ancak Covid-19 pandemi döneminde bu performansları düşüş yaşamıştır. Ayrıca bankalar aktif kalitesi, likidite ve piyasa riskine duyarlılıkta daha başarılı bir performans gösterirken sermaye yeterliliği, yönetim kalitesi ve kârlılıkta daha düşük bir performans gösterdikleri tespit edilmiştir.

show abstract

CAMEL Analysis of Commercial Banks in Nepal

Shah,

Tiwari

2023

J. Comput. Mech. Manag

View full text Add to dashboard Cite

This research paper aims to conduct a comprehensive evaluation of the financial soundness and performance of commercial banks in Nepal through the application of the CAMELS analysis framework. The CAMEL framework, which encompasses Capital adequacy, Asset quality, Management quality, Earnings capability and Liquidity position, serves as a systematic approach to evaluating the overall health and stability of financial institutions. By applying this framework to the commercial banks in Nepal, this study provides valuable insights into the strengths and weaknesses of the banking sector in the country. In this study, a quantitative, descriptive and analytical research design is adopted to conduct the CAMEL analysis of commercial banks in Nepal. This study is based on secondary data collected from published financial reports, annual statements, and regulatory filings of commercial banks in Nepal. A purposive sampling method has been used to select a representative sample of commercial banks in Nepal. CAMEL analysis of commercial banks in Nepal revealed a positive assessment of financial soundness. Most banks demonstrated satisfactory performance across the components of the framework, indicating a generally healthy and stable banking sector. However, there were specific areas of concern, especially for smaller banks, which require closer monitoring and targeted regulatory interventions. The findings can be utilized by policymakers, regulators, and industry practitioners to make informed decisions, address vulnerabilities, and strengthen the overall financial stability of the banking sector in Nepal.

show abstract

Analysis of Financial Performance of Nepalese Commercial Banks using CAMEL Approach

Cited by 4 publications

References 13 publications

Empirical Analysis of Commercial Banks' Loans in Cambodia: Panel Data Models

Empirical Analysis of Commercial Banks' Loans in Cambodia: Panel Data Models

Türkiye’deki Kalkınma ve Yatırım Bankalarının Performanslarının CAMELS Analiz Yöntemiyle Değerlendirilmesi: Covid-19 Pandemi Öncesi Dönem ve Pandemi Döneminin Karşılaştırılması

CAMEL Analysis of Commercial Banks in Nepal

Contact Info

Product

Resources

About