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The Safety of Banks in Vietnam Using CAMEL

Do Thi Thanh Nhan, Kim-Hung Pho, Dang Thi Van Anh and Michael McAleer
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Do Thi Thanh Nhan: Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City, Vietnam
Kim-Hung Pho: Faculty of Mathematics and Statistics, Ton Duc Thang University, Ho Chi Minh City, Vietnam
Dang Thi Van Anh: Department of Finance, Feng Chia University, Taichung City, Taiwan

Advances in Decision Sciences, 2021, vol. 25, issue 2, 158-192

Abstract: A key, important, and popular set of criteria to evaluate the safety, stability, and sustainability of banks is the CAMEL method. The CAMEL system is an abbreviation for indicators that consists of a ranking system for a bank, and includes 5 chief ingredients, namely Capital Adequacy, Asset Quality, Management Quality, Earnings, and Liquidity. Banks need to comply with the CAMEL system in order to facilitate the bank to operate sustainably, safely, and grow larger and stronger. The primary interest in the paper is to analyze the safety, stability, and sustainability of banks in Vietnam. Based on financial statements, data are collected from banks in Vietnam from 2014 to 2017, and the CAMEL method is used to investigate the safety, profitability, liquidity, and risk management of these banks. The data were collected and stored according to banking regulations in Vietnam that have changed over time.

Keywords: CAMEL method; Analyze; Vietnam; Banks. (search for similar items in EconPapers)
JEL-codes: F38 G21 G24 G33 O16 (search for similar items in EconPapers)
Date: 2021
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Handle: RePEc:aag:wpaper:v:25:y:2021:i:2:p:158-192