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Revisiting bank profitability, performance and stability in Asia Pacific (2012-2018) using the EAGLES framework

Duong Dang and John Vong

International Journal of Electronic Finance, 2020, vol. 10, issue 1/2, 116-130

Abstract: Determinants of bank performance, profitability and distress have been extensively assessed by modelling the microeconomic and macroeconomic factors. These factors while important are inadequate, otherwise the financial crises would not have been so devastating that led to bank closures and bankruptcies across the globe. For example the CAMEL bank rating model that forms the basis of central bank regulators has proven insufficient. This research applies the EAGLES framework that was built on the CAMELS bank rating model. The study focussed on 48 banks across Asia Pacific between 2012 to 2018. In particular the study shall highlight the strategic response quotient (SRQ) of the EAGLES framework. The SRQ is derived from the computation of the interaction of four financial data components, namely, interest income, fee-based income, interest cost and operational expenses. The paper found that the identified data components predicted and presented bank stability and profitability with a unique perspective.

Keywords: strategic response quotient; SRQ; bank strategy; return on assets; ROAs; return on equity; CAMEL; non-performing loans; bank staff cost; financial institutions in distress. (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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