Financial Performance Measurement Using CAMEL Model: A Study on Selected Public and Private Banks of Bangladesh

A.K.M Mahfuj Ullah

The present study aims mainly at measuring the financial performance of the ten selected banks of Bangladesh and highlighting the financial strength of those banks as well as distinguishing whether any significant difference exists in their performance using CAMEL (basically a quantitative technique) model. To meet the purpose of the study, total ten public and private banks have been chosen as samples & their annual reports (2012-2018) served for the purpose of analysis through Average, Composite Rankings and ANOVA-test by using SPSS software. The study showed that under the capital adequacy & liquidity ratio parameters, DBBL secured the highest rank, while Bangladesh Krishi Bank Ltd. held the lowest position. In the event of the asset quality parameter, DBBL also ranked with the top position whereas Sonali Bank Ltd. and BASIC Bank Ltd. pertained to the lowest rank simultaneously. SIBL and Agrani Bank Ltd. belonged to the highest and lowest rank position under management efficiency parameter while DBBL and Sonali Bank Ltd. held the first and last position in terms of earning quality parameter respectively. After considering CAMEL parameters, it is evident that DBBL got the top position for its strong performance followed by SIBL whereas Sonali Bank Ltd. secured the lowest position due to its poor performance almost in every aspects which suggested to concentrate on its weak financial activities and improve accordingly. Lastly, the ANOVA test revealed that a significant difference existed in the selected banks’ performance in the study assessed by the CAMEL framework. However, the findings of the study will definitely support the interested parties to comprehend analyzing financial statement in a profundity way and give a uniform premise to distinguish the organizations requiring special care and supervisory attention.

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