Performance evaluation using the CAMELS model: A comparative study of local commercial banks in Qatar and Kuwait
Open Access
- 4 October 2021
- journal article
- Published by LLC CPC Business Perspectives in Banks and Bank Systems
- Vol. 16 (3), 152-165
- https://doi.org/10.21511/bbs.16(3).2021.14
Abstract
Nowadays, the banking system is undergoing significant changes. Digitalization that appears in Industry 4.0 also pioneers in the banking system, so we can also talk about Bank 4.0 as a new development direction. In this shift in the digital age, it becomes even more critical to examine the performance of banks. The case study approach was based on an attempt to diagnose the performance of a sample of local commercial banks in Qatar and Kuwait based on their financial statements for the period 2013–2017, and approve the existing accounting data as sources for the financial analysis process, by using essential financial analysis tools such as financial ratios. The output of the analysis was used to measure performance. All this is applicable when using the CAMELS rating model to evaluate the financial performance of the banking sector. The results show statistically significant differences between countries for four factors (Asset quality, Management efficiency, Earnings quality and Sensitivity) and none for the remaining two (Capital adequacy and Liquidity management) because the significant level is higher than 5%. However, the two factors with no significant differences are vital to the prudent operation of banks, mainly that Qatari banks perform better than Kuwaiti banks.Keywords
This publication has 13 references indexed in Scilit:
- Efficiency of Qatari banking industry: an empirical investigationInternational Journal of Bank Marketing, 2017
- Financial Performance Of Selected Conventional And Islamic Banks In Kingdom Of Bahrain – A CAMEL Ranking Based ApproachEuropean Journal of Economics, Law and Politics, 2016
- CAMELS-based Determinants for the Credit Rating of Turkish Deposit BanksInternational Journal of Finance & Banking Studies (2147-4486), 2015
- Determinants of Bank Profitability in Nigeria: Using Camel Rating Model (2001 – 2010)IOSR Journal of Business and Management, 2014
- A Working Paper on the Impact of Gender of Leader on the Financial Performance of the Bank: A Case of ICICI BankProcedia Economics and Finance, 2014
- Comparative Performance Evaluation of Selected Commercial Banks in Kingdom of Bahrain Using CAMELS MethodSSRN Electronic Journal, 2014
- Analysing the Financial Soundness of the Commercial Banks in Romania: An Approach based on the Camels FrameworkProcedia Economics and Finance, 2013
- A Performance Evaluation of the Turkish Banking Sector after the Global Crisis via CAMELS RatiosProcedia - Social and Behavioral Sciences, 2011
- Health Check-up of Commercial Banks in the Framework of CAMEL: A Case Study of Joint Venture Banks in NepalJournal of Nepalese Business Studies, 2005
- Evaluating the productive efficiency and performance of US commercial banksManagerial Finance, 2002