Browsing by Author "Mengesha Ermias"

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    Financial Performance of Private Commercial Banks in Ethiopia: A CAMEL Approach
    (Addis Ababa University, 2016-02) Mengesha Ermias; Yitayew Abebe
    The role of banking sector for sustainable growth of a nation is unquestionable. Hence, this paper has investigated the effects of internal determinants of profitability of six senior private Ethiopian commercial banks over the period 2000-2014 and thereby ranked the overall financial performance of the respective banks based on CAMEL model This paper used fixed effect least square method to estimate the impact of bank specific factors and detailed descriptive statistics and regression analysis has been used to assess the relationships between the bank specific variables that comprise CAMEL model and return on assets has been used as a measure of profitability. The findings indicated that bank specific factors incorporated in the CAMEL model affect to the extent of 67.5% of the changes in profitability of the private commercial banks in Ethiopia. Moreover, ranking of the respective banks was made based on the aggregate of multi-dimensional parameters of each bank specific proxies found in the CAMEL model. As a result, UNB, NIB, and BOA have held from 1 st to 3 rd rank based on the CAMEL model composite rating system. Key words: CAMEL model, Multi-dimensional ranking, Ethiopian private commercial banks