Comparative Performance Evaluation of Selected Commercial Banks in Kingdom of Bahrain Using CAMELS Method

Venkatesh, J.; Suresh, C.

doi:10.2139/ssrn.2418144

Cited by 8 publications

(10 citation statements)

References 3 publications

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“…Capital is one of the vital factors that determine banking operations and stability in terms of the available capital in the banks. Capital adequacy refers to the availability of capital from a bank to cover unexpected losses and to avoid reductions in asset value which could cause a banking institution's failure, and the banks' ability to satisfy depositors if they require their investments (Rena, 2006;Venkatesh and Suresh, 2014). Baek, Balasubramanian and Lee (2015) scrutinized US commercial banks from 2000 to 2013 covering the subprime crisis using quarterly data between failed and non-failed banks.…”

Section: Literature Reviewmentioning

confidence: 99%

An Empirical Analysis of the Relationship Between Capital, Market Risks, and Liquidity Shocks in the Banking Industry

Rena

Kamuinjo

2022

Studia Universitatis Babes-Bolyai Oeconomica

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This study explores the relation between capital, market risks and banks’ liquidity conditions. In estimating the SVAR regression model, Granger causality, impulse-response functions and forecast error variance decomposition were employed and used for estimation of the results. The data sample comprised of commercial banks over the 2009 to 2018 period. The empirical results showed that liquidity shocks are caused by a combination of structural shocks. The Granger causality, impulse-response functions and forecast error variance decomposition documented that sensitivity to market risk is the key factor affecting liquidity conditions in the banking sector in the long run. In addition, the empirical results showed that capital adequacy has minimal impact on liquidity conditions in the short run. The reforming rate to sensitivity to market risk policies, capital adequacy policies and liquidity policy measures can be valuable policy tools to minimize liquidity shortages and avoid insolvent banks.

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Section: Literature Reviewmentioning

confidence: 99%

An Empirical Analysis of the Relationship Between Capital, Market Risks, and Liquidity Shocks in the Banking Industry

Rena

Kamuinjo

2022

Studia Universitatis Babes-Bolyai Oeconomica

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“…Earning quality refers to the ability of a bank to generate profit compared to the expenses it incurred (Venkatesh et al 2014). Earning quality ratios are used to measure the profit of a bank and also the ability of a bank to maintain consistent earnings (Tripathi, Meghani, Mahajan, 2014 andGupta, 2014).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Liquidity ratios are used to measure the ability of a bank to meet its commitments whenever they come due, for example, the depositors' withdrawals demand (Gupta, 2014 andLe, 2017). Venkatesh et al (2014) argue that the inability to satisfy these commitments will affect performance and lead to bank financial constraints. To avoid the liquidity shortfall, the bank is required to hold high liquid assets that can be easily changed into cash, forecast future cash inflow and outflow, and be able to obtain loans from the inter-bank market (Ishag, Karim, Zaheer and Ahmed, 2015).…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of credit risk and profitability on liquidity shocks of Namibian banks: an application of the structural VAR model

Kamuinjo¹,

Rena²,

Maredza³

2021

JLECON

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The main purpose of this paper was to investigate the relationship between banks’ credit risk and profitability and liquidity shocks in Namibia for the period 2009 to 2018 using the SVAR model. In estimating the SVAR regression model, granger causality, impulse-response functions and forecast error variance decomposition were employed and evaluated. The sample consisted of Namibian commercial banks. By auditing liquidity data between 2009 and 2018, empirical results showed that liquidity risk is caused by a combination of structural shocks. The granger causality, impulse-response functions and forecast error variance decomposition documented that credit risk (non-performing loans) is key factor affecting liquidity conditions in Namibia in the medium to long run. In addition, the empirical results showed that quality earnings (ROA) have minimal impact on liquidity conditions in the short run. Reforming assets quality policies and earnings quality policies can be valuable policy tools to minimize liquidity shortages and avoid insolvent banks in Namibia.

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“…There are several methods in measuring the soundness of a bank, one of which is using the CAMELS method. CAMELS framework was used by many researchers to evaluate the solvency and liquidity of commercial banks (Venkatesh & Suresh, 2014). The CAMELS approach is internationally used as a scoring system by bank supervisors when comparing tires with six factors and is given the name CAMELS (Fares & Nobanee, 2020).…”

Section: Introductionmentioning

confidence: 99%

Effect of CAMELS Ratio on Indonesia Banking Share Prices

Nugroho¹,

Halik²,

Arif³

2020

JAFEB

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The research was conducted with the aim of knowing the effect of the CAMELS ratio either partially or simultaneously on stock prices. The CAMELS ratio (Capital, Asset Quality, Management, Earning, Liquidity) is used to measure the soundness of a bank, where by the better the soundness of the bank, the more profitable the bank will be for potential investors and other interested parties. The population of this research consists of the four state banks documented on the Indonesia Stock Exchange over the 2012-2019 period. The sample selection technique is a saturated sampling. This study provides the results that partially CAR has a significant effect on the share price of government banks listed on the IDX. Meanwhile, NPL, NPM, ROA, and LDR do not have a significant effect on stock prices of state banks listed on the IDX. The results of the regression analysis show that, together the CAMELS ratio, which is proxied by CAR, NPLS, NPM, ROA, and LDR has a positive and significant influence on the share price of state-owned banks documented on the Indonesia Stock Exchange, so this can be used as a reference for investors in predicting the share price of a state-owned bank before investing in shares.

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Comparative Performance Evaluation of Selected Commercial Banks in Kingdom of Bahrain Using CAMELS Method

Cited by 8 publications

References 3 publications

An Empirical Analysis of the Relationship Between Capital, Market Risks, and Liquidity Shocks in the Banking Industry

An Empirical Analysis of the Relationship Between Capital, Market Risks, and Liquidity Shocks in the Banking Industry

Impact of credit risk and profitability on liquidity shocks of Namibian banks: an application of the structural VAR model

Effect of CAMELS Ratio on Indonesia Banking Share Prices

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