A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach

Dereje Birhanie

doi:doi:10.11648/j.ijafrm.20200504.11

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A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach

Dereje Birhanie

Published in International Journal of Accounting, Finance and Risk Management (Volume 5, Issue 4)

Received: 22 October 2020 Accepted: 5 November 2020 Published: 19 November 2020

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Abstract

This study was aimed at measuring the financial performance of some selected private banks in Ethiopia. The financial performance of selected banks has been measured by using the five too important components of financial measures; those are capital adequacy, asset quality, management capacity, earning capacity and liquidity of banks. To this end necessary audited financial statements and related disclosures of selected private banks, which were prepared in line with international financial reporting standards for three consecutive years from 2017-2019 have been used. The collected secondary data have been analyzed by using a ratio analysis model. In line with comparison of selected private banks each other, the study revealed the following results. When Capital adequacy is used as a performance measure, comparatively Addis international bank is treated as capitally adequate and safe for creditors and depositors in repaying the loan what it is received. Abay bank, Dashen bank and Abyssinia bank jointly treated as relatively safe and capitally adequate next to Addis international bank. In terms of asset quality, awash international bank relatively treated better in managing credit followed by bank of Abyssinia and Addis international bank. When management efficiency is used as a performance measure of banks, Addis international bank is comparatively efficient in utilizing its assets to generate income a lot as compared to the remaining banks under study. In its earning quality, awash international bank has selected as the leader of the remaining banks. The study also concludes the performance of banks in terms of liquidity as one component of CAMEL, based on the analysis Abay bank outperforms the remaining banks.

Published in	International Journal of Accounting, Finance and Risk Management (Volume 5, Issue 4)
DOI	10.11648/j.ijafrm.20200504.11
Page(s)	174-183
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Asset Quality, Capital Adequacy, Earning capacity, Management Efficiency, Liquidity

References

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[2]	Eshna, V. (2020). Financial Performance, Understaning its concepts and importance. Retrived from https://www.simplilearn.com/financial-performance-rar21-article.
[3]	Andualem, S. (2013). Ethiopia’s Awash International Bank: growth amid challenges.
[4]	Corporate Finance Institute. (2017). Top banks in Ethiopia: overview of Ethiopia’s leading financial institutions.
[5]	Teshome, M. (2015). Evaluating the Financial Performance of Ethiopian Banks Using Financial Indicators-A Case Study on Dashen Bank.
[6]	kiran, K. (2018 ). A CAMEL model analysis of selected public and private sector banks in india;. international journal of management, IT and engineering,, vol. 8 issue 8.
[7]	Aguenaous, Lahrech. A, bounakaya s,. (2017). analyzing the banks efficiency as a measurement of performance in the Moroccan context: application of CAMEL frame work: international review of research in emerging markets and global economy 2017, volume 3, issue 1.
[8]	Chowdhury. T. S. (2019). a comparative study of profitability analysis in bankng sector of Bangladesh: Global journal of management and business research: administration and management, volume 19, issue 8.
[9]	Abdullah M,(2015). An empirical analysis of liquidity, profitability and solvency of Bangladesh banks:. journal of business and financial affairs.
[10]	Ali, M. (2016). bank profitability and its determinants in Pakistan: a panel data analysis after financial crisis;. journal of finance and economic research;, volume 1, issue 1.
[11]	Trofimov, Ivan. D, etal. (2018). Determinants of commercial banks profitability in Malaysia: Munich personalRePEC Archive.
[12]	Uniform Financial Institutions Rating System (UFIRS) (1996) FDIC Law, Regulations, Related Acts.

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APA Style

Dereje Birhanie. (2020). A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach. International Journal of Accounting, Finance and Risk Management, 5(4), 174-183. https://doi.org/10.11648/j.ijafrm.20200504.11

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ACS Style

Dereje Birhanie. A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach. Int. J. Account. Finance Risk Manag. 2020, 5(4), 174-183. doi: 10.11648/j.ijafrm.20200504.11

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AMA Style

Dereje Birhanie. A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach. Int J Account Finance Risk Manag. 2020;5(4):174-183. doi: 10.11648/j.ijafrm.20200504.11

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@article{10.11648/j.ijafrm.20200504.11,
  author = {Dereje Birhanie},
  title = {A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {5},
  number = {4},
  pages = {174-183},
  doi = {10.11648/j.ijafrm.20200504.11},
  url = {https://doi.org/10.11648/j.ijafrm.20200504.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20200504.11},
  abstract = {This study was aimed at measuring the financial performance of some selected private banks in Ethiopia. The financial performance of selected banks has been measured by using the five too important components of financial measures; those are capital adequacy, asset quality, management capacity, earning capacity and liquidity of banks. To this end necessary audited financial statements and related disclosures of selected private banks, which were prepared in line with international financial reporting standards for three consecutive years from 2017-2019 have been used. The collected secondary data have been analyzed by using a ratio analysis model. In line with comparison of selected private banks each other, the study revealed the following results. When Capital adequacy is used as a performance measure, comparatively Addis international bank is treated as capitally adequate and safe for creditors and depositors in repaying the loan what it is received. Abay bank, Dashen bank and Abyssinia bank jointly treated as relatively safe and capitally adequate next to Addis international bank. In terms of asset quality, awash international bank relatively treated better in managing credit followed by bank of Abyssinia and Addis international bank. When management efficiency is used as a performance measure of banks, Addis international bank is comparatively efficient in utilizing its assets to generate income a lot as compared to the remaining banks under study. In its earning quality, awash international bank has selected as the leader of the remaining banks. The study also concludes the performance of banks in terms of liquidity as one component of CAMEL, based on the analysis Abay bank outperforms the remaining banks.},
 year = {2020}
}

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TY  - JOUR
T1  - A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach
AU  - Dereje Birhanie
Y1  - 2020/11/19
PY  - 2020
N1  - https://doi.org/10.11648/j.ijafrm.20200504.11
DO  - 10.11648/j.ijafrm.20200504.11
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 174
EP  - 183
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20200504.11
AB  - This study was aimed at measuring the financial performance of some selected private banks in Ethiopia. The financial performance of selected banks has been measured by using the five too important components of financial measures; those are capital adequacy, asset quality, management capacity, earning capacity and liquidity of banks. To this end necessary audited financial statements and related disclosures of selected private banks, which were prepared in line with international financial reporting standards for three consecutive years from 2017-2019 have been used. The collected secondary data have been analyzed by using a ratio analysis model. In line with comparison of selected private banks each other, the study revealed the following results. When Capital adequacy is used as a performance measure, comparatively Addis international bank is treated as capitally adequate and safe for creditors and depositors in repaying the loan what it is received. Abay bank, Dashen bank and Abyssinia bank jointly treated as relatively safe and capitally adequate next to Addis international bank. In terms of asset quality, awash international bank relatively treated better in managing credit followed by bank of Abyssinia and Addis international bank. When management efficiency is used as a performance measure of banks, Addis international bank is comparatively efficient in utilizing its assets to generate income a lot as compared to the remaining banks under study. In its earning quality, awash international bank has selected as the leader of the remaining banks. The study also concludes the performance of banks in terms of liquidity as one component of CAMEL, based on the analysis Abay bank outperforms the remaining banks.
VL  - 5
IS  - 4
ER  -

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Author Information

Dereje Birhanie

Department of Accounting and Finance, Debre Markos University, Debre Markos, Ethiopia

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Plain Text BibTeX RIS

APA Style

Dereje Birhanie. (2020). A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach. International Journal of Accounting, Finance and Risk Management, 5(4), 174-183. https://doi.org/10.11648/j.ijafrm.20200504.11

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ACS Style

Dereje Birhanie. A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach. Int. J. Account. Finance Risk Manag. 2020, 5(4), 174-183. doi: 10.11648/j.ijafrm.20200504.11

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AMA Style

Dereje Birhanie. A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach. Int J Account Finance Risk Manag. 2020;5(4):174-183. doi: 10.11648/j.ijafrm.20200504.11

Copy | Download

@article{10.11648/j.ijafrm.20200504.11,
  author = {Dereje Birhanie},
  title = {A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {5},
  number = {4},
  pages = {174-183},
  doi = {10.11648/j.ijafrm.20200504.11},
  url = {https://doi.org/10.11648/j.ijafrm.20200504.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20200504.11},
  abstract = {This study was aimed at measuring the financial performance of some selected private banks in Ethiopia. The financial performance of selected banks has been measured by using the five too important components of financial measures; those are capital adequacy, asset quality, management capacity, earning capacity and liquidity of banks. To this end necessary audited financial statements and related disclosures of selected private banks, which were prepared in line with international financial reporting standards for three consecutive years from 2017-2019 have been used. The collected secondary data have been analyzed by using a ratio analysis model. In line with comparison of selected private banks each other, the study revealed the following results. When Capital adequacy is used as a performance measure, comparatively Addis international bank is treated as capitally adequate and safe for creditors and depositors in repaying the loan what it is received. Abay bank, Dashen bank and Abyssinia bank jointly treated as relatively safe and capitally adequate next to Addis international bank. In terms of asset quality, awash international bank relatively treated better in managing credit followed by bank of Abyssinia and Addis international bank. When management efficiency is used as a performance measure of banks, Addis international bank is comparatively efficient in utilizing its assets to generate income a lot as compared to the remaining banks under study. In its earning quality, awash international bank has selected as the leader of the remaining banks. The study also concludes the performance of banks in terms of liquidity as one component of CAMEL, based on the analysis Abay bank outperforms the remaining banks.},
 year = {2020}
}

Copy | Download

TY  - JOUR
T1  - A Comparative Financial Performance Analysis of Some Selected Private Commercial Banks of Ethiopia: A CAMEL Approach
AU  - Dereje Birhanie
Y1  - 2020/11/19
PY  - 2020
N1  - https://doi.org/10.11648/j.ijafrm.20200504.11
DO  - 10.11648/j.ijafrm.20200504.11
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 174
EP  - 183
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20200504.11
AB  - This study was aimed at measuring the financial performance of some selected private banks in Ethiopia. The financial performance of selected banks has been measured by using the five too important components of financial measures; those are capital adequacy, asset quality, management capacity, earning capacity and liquidity of banks. To this end necessary audited financial statements and related disclosures of selected private banks, which were prepared in line with international financial reporting standards for three consecutive years from 2017-2019 have been used. The collected secondary data have been analyzed by using a ratio analysis model. In line with comparison of selected private banks each other, the study revealed the following results. When Capital adequacy is used as a performance measure, comparatively Addis international bank is treated as capitally adequate and safe for creditors and depositors in repaying the loan what it is received. Abay bank, Dashen bank and Abyssinia bank jointly treated as relatively safe and capitally adequate next to Addis international bank. In terms of asset quality, awash international bank relatively treated better in managing credit followed by bank of Abyssinia and Addis international bank. When management efficiency is used as a performance measure of banks, Addis international bank is comparatively efficient in utilizing its assets to generate income a lot as compared to the remaining banks under study. In its earning quality, awash international bank has selected as the leader of the remaining banks. The study also concludes the performance of banks in terms of liquidity as one component of CAMEL, based on the analysis Abay bank outperforms the remaining banks.
VL  - 5
IS  - 4
ER  -

Copy | Download