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

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  • Md. Zahidur Rahman
  • Md. Shohidul Islam

Abstract

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.

Suggested Citation

  • Md. Zahidur Rahman & Md. Shohidul Islam, 2018. "Use of CAMEL Rating Framework: A Comparative Performance Evaluation of Selected Bangladeshi Private Commercial Banks," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(1), pages 120-128, January.
    • Handle: RePEc:ibn:ijefaa:v:10:y:2018:i:1:p:120-128
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    References listed on IDEAS

    as
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    3. Serhat Yuksel & Hasan Dincer Author-Workplace-Associate Professor of Finance, School of Business and Management Sciences & Umit Hacioglu, 2015. "CAMELS-based Determinants for the Credit Rating of Turkish Deposit Banks," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 4(4), pages 01-17, October.
    4. International Monetary Fund, 2002. "Financial Soundness Indicators: Analytical Aspects and Country Practices," IMF Occasional Papers 2002/003, International Monetary Fund.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    capital adequacy; assets quality; management efficiency; earnings ability; liquidity management; bank¡¯s performance evaluation;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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