Determining the Priorities of CAMELS Dimensions Based on Bank Performance

Pekkaya, Mehmet; Demir, Figen Erol

doi:10.1007/978-3-319-78494-6_21

Cited by 11 publications

(6 citation statements)

References 15 publications

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“…At this point, repeating the analysis using different weights increase the reliability of the results. Pekkaya and Demir (2018) prioritize the CAMELS dimensions. In the sensitivity analysis, the weights determined in the study of Pekkaya and Demir (2018) are used.…”

Section: Resultsmentioning

confidence: 99%

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Multi-Criteria Financial Performance Analysis of Turkish Participation Banks

Yağlı

2020

Alanya Akademik Bakış

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The current study aims to compare the performance of state participation banks with the performance of private participation banks. This comparison is quite significant since both state participation banks have a very short history and Turkey is a model for the world in interest-free banking. The integrated approach is adopted in the study. In the first stage, performance indicators are determined with the help of the CAMELS rating system. In the second stage, Turkish participation banks are ranked according to their relative performance by using the TOPSIS method. The results show that state participation banks outperform private participation banks. These results are valid even when different weights are used for CAMELS dimensions.The main objectives of the establishment of participation banks, also known as Islamic banks, are as follows (Aras and Öztürk, 2011: 170):

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Section: Resultsmentioning

confidence: 99%

“…Pekkaya and Demir (2018) prioritize the CAMELS dimensions. In the sensitivity analysis, the weights determined in the study of Pekkaya and Demir (2018) are used. Accordingly, the weights of CAMELS components are taken as 10.03%, 24.75%, 17.68%, 19.16%, 18.54%, 11.11%, respectively.…”

Section: Resultsmentioning

confidence: 99%

Multi-Criteria Financial Performance Analysis of Turkish Participation Banks

Yağlı

2020

Alanya Akademik Bakış

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“…Studies have used profitability of banks, asset ratio, liquidity ratio, cost/income ratio and many more for the evaluation of performance (Harahap, 2018;Ibrahim, 2020;Hanif et al, 2012). However, most of the studies found CAMEL as an efficient tool for measuring banks' financial performance (Pekkaya and Demir, 2018;Todorovi c et al, 2018;Mohammed et al, 2015). Therefore, many studies were conducted on measuring the financial condition of conventional and Islamic banks using this CAMEL framework.…”

Section: Literature Reviewmentioning

confidence: 99%

“…, 2012). However, most of the studies found CAMEL as an efficient tool for measuring banks’ financial performance (Pekkaya and Demir, 2018; Todorović et al. , 2018; Mohammed et al.…”

Section: Literature Reviewmentioning

confidence: 99%

Financial strength of banking sector in Bangladesh: a CAMEL framework analysis

Afroj

2022

AJEB

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PurposeThis paper investigates the financial strength of banks in Bangladesh and factors affecting the financial strength over the years 2010–2015 on 35 banks.Design/methodology/approachAdditive value function with CAMEL rating (capital stength, asset quality, managerial efficiency, earning ability, liquidity) has been employed to calculate banks’ financial strength index (FSI). In the second stage, panel regression has been exercised to find out the determinants of banks’ financial strength.FindingsEmpirical finding exhibits that the Islamic banks of Bangladesh are financially stronger and outperform conventional and Islamic window banks with higher liquidity. In the ownership category, private banks have more financial strength with higher capital strength, asset quality, managerial efficiency and earning ability than public banks. Bank size, loan recovery, salary and banking sector development positively affect whereas the loan-asset negatively affect the bank’s financial strength in Bangladesh.Research limitations/implicationsThis study has its limitations despite its importance. CAMELS is a more improved form than using CAMEL. But because of the data deficiency on “S” which represents sensitivity, it would not be possible to use CAMELS framework. Further researchers could incorporate this.Practical implicationsGovernment and banks should allow Islamic banks to enter the market on easy terms because of their outstanding performance in the existing market. In addition, banks should provide loans with consideration so that they cannot create credit risk. In addition, they should calculate composite financial strength annually to understand which components they need to work on.Originality/valueThis study extends the extant result on the composite FSI. It is hard to examine the financial strength of banks using only ratio value, which misleads most of the time. The study offers evidence on how the FSI provides more rigorous results and what are the factors contribute most to the financial strength of banks.

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“…According to Pekkaya and Demir (2018) banking in any economy serves as the fundamental source for financial strength. The banks have a direct and indirect impact on almost all industries.…”

Section: Introductionmentioning

confidence: 99%

Use of Camel Rating Framework: A Comparative Performance Analysis of Selected Commercial Banks in India

Kulshrestha

Srivastava

2022

CJFA

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The performance of the banking sector is significant for any economy. The growth of a nation relies significantly upon efficient and optimum utilization of resources and also on operational efficiency of various sectors of an economy, of which the banking sector is a critical part. Banking system strengthens the stimulation of capital formation and provides liquidity. Indian banking sector comprises private, public, rural and foreign banks. In India, public sector banks are encountering challenges from private sector banks and are under constant pressure to perform better. Hence, this study endeavors mainly to analyze and compare the financial performance of the private and public banking sector by using CAMEL rating approach and for this purpose total of fourteen banks, representing the private and public, have been selected. The selected sample are the market leaders and have the highest market capitalization in the capital market. Overall, the paper aims to measure and compare the financial performance of private and public sector banks by employing CAMEL approach on their audited financial reports of eight years period i.e. (2011–2018). The ratios considered for this analysis includes Capital Adequacy (CA), Asset Quality (AQ), Management Soundness (MS), Earnings and Liquidity (LR). This study devised ranking method based on averages of various ratios and one way annova test is applied to find out statistical significance difference amongst groups. Results shown that private sector banks are better performers compare to Public sector bank. The overall results signify that the performance of private sector banks has improved because of the implementation ofmodern technology banking reforms and recovery mechanism.

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Determining the Priorities of CAMELS Dimensions Based on Bank Performance

Cited by 11 publications

References 15 publications

Multi-Criteria Financial Performance Analysis of Turkish Participation Banks

Multi-Criteria Financial Performance Analysis of Turkish Participation Banks

Financial strength of banking sector in Bangladesh: a CAMEL framework analysis

Use of Camel Rating Framework: A Comparative Performance Analysis of Selected Commercial Banks in India

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