Analysis of Financial Status of Selected Commercial Banks in Ethiopia: An Examination of Capital Growth Over the Past Ten Years
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Date
2024-03-05
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AAU
Abstract
This study investigates the financial performance of eight commercial banks in Ethiopia over
the period from 2013 to 2022 using the CAMEL method. The primary aim is to examine the
capital growth trend through CAMEL variables on return on assets (ROA) and ranking the
banks based on their individual financial performances. The study adopts a positivist research
methodology due to its adaptability in studying pattern for quantitative techniques to achieve
a comprehensive understanding of the subject. In this research, the CAMEL framework serves
as the foundation, with the performance measure of ROA and CAMEL. The study emphasizes
the importance of banks focusing on increasing total assets by mobilizing deposits and
efficiently converting them into loans. Notably, the research suggests that total asset size is a
determinant factor in enhancing return on assets. This thesis contributes to the existing body
of knowledge by shedding light on the specific CAMEL variables that significantly affect
financial performance in the Ethiopian banking sector. The findings provide actionable
insights for banks to optimize their operations, enhance asset quality, and ultimately improve
profitability