An Evaluation of Financial Health of Nigerian Deposit Money Banks using CAMELS Rating Model

Babatunde Rahman Yusuf and Jamiu Olakunle Tijani
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Babatunde Rahman Yusuf: Lagos State University, Lagos, Nigeria
Jamiu Olakunle Tijani: Lagos State University, Lagos, Nigeria

Economics and Applied Informatics, 2019, issue 1, 48-61

Abstract: This study evaluates the financial health of Deposit Money Banks (DMBs) in Nigeria using CAMELS Rating Model based on three characteristics. Using ex-post facto research design, secondary data which covers years 2010 to 2017 were collected from the annual reports of the selected listed DMBs. Guided by three research objectives, the study formulates and tests three hypotheses. Mean and independent sample t-test are employed to present and analyse the data. The paper, inter alia, provides evidence of a statistically significant difference between the financial health of Domestic-Systemically Important and Domestic-Non-Systemically Important DMBs in Nigeria (tcal (10) =2.832 > ttab=2.228; p-value= 0.018). Based on these findings, the paper concludes that the financial health of DMBs do not differ based on the type of operating licence they hold and the structure they operate. The study recommends that Central Bank of Nigeria should tighten its prudential guidelines on DMBs in Nigeria.

Keywords: CAMELS; Operating Licence; Systemic Importance; Operating Structure; Financial Health; Deposit Money Banks (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ddj:fseeai:y:2019:i:1:p:48-61

DOI: 10.35219/eai158404097

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