Empirical Evidence on the Impact of Bank-Specific Factors on the Commercial Banks Performance: the CAMEL Model and Case of Ethiopian Banks

Abdurezak Mohammed Kuhil

Authors

Abdurezak Mohammed Kuhil

Keywords:

Performance, Commercial Banks, Ethiopia, CAMEL Model

Abstract

The study has investigated one of the key research questions: how do bank specific factors are related to bank performance? The model constructed is framed based on the commonly used supervisory tool to monitor bank performance: CAMEL. This consists of elements from Capital Adequacy, Asset Quality, Management, Earning and Liquidity. It has used six variables representing each of the components and run a regression model based on fixed and random models. The outcome shows that many of the bank specific factors have a significant statistical relationship with performance measures. Despite the mixed result in the various models, the study explored that bank's capital holding, asset quality and business diversification, cost control and liquidity positions are important part of the management decisions to have a significant influence on performances.

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Empirical Evidence on the Impact of Bank-Specific Factors on the Commercial Banks Performance: the CAMEL Model and Case of Ethiopian Banks. (2018). Global Journal of Management and Business Research, 18(C5), 19-30. https://journalofbusiness.org/index.php/GJMBR/article/view/2535

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