Performance Assessment of Commercial Banks using CAMEL Indicators: Case Study of Pakistan

Abstract

The purpose of this study is to conduct an in-depth investigation to gauge whether
CAMEL indicators have an impact on performance of Commercial banks
operating in Pakistan. For this study, a sample of 10 Commercial banks operating
in Pakistan’s Banking Industry for the period 2012-2018 has been selected.
Empirical results revealed that bank performance can be influenced by asset
quality, earnings quality and liquidity. Capital adequacy and management
efficiency has no impact on EPS (proxy for bank performance). The findings
outcome is imperative to various parties who have stake in banking sector e.g.
depositors, shareholders, SBP, investors etc. It can also be used as a basis to
identify the areas where the banks are performing poorly and take suitable actions
which would assist in sustaining and growing the banking sector of Pakistan.

Keywords:
CAMEL,ROA,CAR, Management, Efficiency, Asset Quality, Banks Performance