Financial Performance of Ethiopian Private Banks, CAMEL Approach
No Thumbnail Available
Date
2021-03
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
The purpose of banking sector for reasonable growth of a nation is no need to asking a question. Hence, this study paper has predicted the effects of internal determinants of profitability 6 senior private Ethiopian commercial banks over the period of 2004 up to 2018 and thereby ranked the financial performance of the respective private banks based on CAMEL model. This study paper used fixed effects least square method to estimate the effect of banks 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 results indicated that the bank specific factors incorporated in the CAMEL model affects to the extent of 88.09% of the changes in profitability of the private commercial banks of Ethiopia. Furthermore, 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, NIB, UNB, and BOA have held from 1st to 3rd rank based on the CAMEL model composite rating system.
Description
Keywords
Ethiopian Private Banks