Financial Performance Of Private Commercial Banks In Ethiopia A Camel Approach

The role of banking sector for sustainable growth of a nation is unquestionable. Hence, this paper has investigatedrnthe effects of internal determinants of profitability of six senior private Ethiopian commercial banks over the periodrn2000-2014 and thereby ranked the overall financial performance of the respective banks based on CAMEL modelrnThis paper used fixed effect least square method to estimate the impact of bank specific factors and detailedrndescriptive statistics and regression analysis has been used to assess the relationships between the bank specificrnvariables that comprise CAMEL model and return on assets has been used as a measure of profitability. Thernfindings indicated that bank specific factors incorporated in the CAMEL model affect to the extent of 67.5% of thernchanges in profitability of the private commercial banks in Ethiopia. Moreover, ranking of the respective banks wasrnmade based on the aggregate of multi-dimensional parameters of each bank specific proxies found in the CAMELrnmodel. As a result, UNB, NIB, and BOA have held from 1 st to 3 rd rank based on the CAMEL model composite ratingrnsystem.rnKey words: CAMEL model, Multi-dimensional ranking, Ethiopian private commercial banks

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