Financial Performance of Deposit Banks Using The CAMELS Ratios: Composite Index Approach

Nur Duygu Keten and Atalay Çağlar

Alphanumeric Journal, 2019, vol. 7, issue 2, 417-436

Abstract: CAMELS rating system are used means of remote surveillance. This indicator including six sub-indicators namely, capital adequacy, asset quality, management quality, earning, liquidity, sensitivity to market. The aim of this study is to evaluate bank performances by using CAMELS ratios. In this study, firstly, an index was constructed for each component with DEA-like model and later was created CAMELS composite index. At first, index value was obtained of each bank and sorted. Then by, the arithmetic means of the index values found for each component was taken as the ultimate composite index value and was made a general ranking. As a result, composite index was created. Result of analysis in capital adequacy, Arap Turk Bank, Citibank and Turkish Bank was ranked among the top three. In the asset quality, Turkey Vakıfbank, Fibabank and Turkish Bank while these banks in the first place, for management quality, T.C. Ziraat Bank, Akbank and Turkey Halk Bank the highest index is the most valuable banks. In the earning, T.C. Ziraat Bank, Citibank and Akbank found the banks with the best efficiency. In the liquidity, Arap Turk Bank, Turkey Garanti Bank and Citibank are ranked among the top three. As the last component, in the sensitivity to market, Turkish Bank, Alternatifbank and Arap Türk Bank. To make a general assessment, that in according to composite index which created from CAMELS rates, Citibank, Arap Turk Bank and Turkish Bank are in the top places, but Sekerbank, Turkland Bank and Finansbank are in the last places.

Keywords: Banks; CAMELS; Composite Index; Financial Performance; Multi Criteria Decision Making (search for similar items in EconPapers)
JEL-codes: C44 C51 C61 G20 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:anm:alpnmr:v:7:y:2019:i:2:p:417-436

DOI: 10.17093/alphanumeric.493946

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