Camel Analysis

COMPARISON OF OPERATIONAL EFFICIENCY
OF LISTED BANKS FROM KERALA –

A STUDY BASED ON CAMEL ANALYSIS
Aarya. S
Dr. Vineeth K. M
Government College, Tripunithura
INTRODUCTON
Bank is a financial institution that contributes towards the
development of an economy and it is treated as an important service
industry. They are the pillars of an economy. It plays an important
role in distributing the money for the development of trade, industry
and commerce.
The performance of banks has been an issue of major interest for

various stakeholders such as depositors, regulators, customers and
investors. Efforts have been made from time to time, to measure the
financial position of each bank and to manage it efficiently and
effectively.
Statement of the problem
Performance and efficiency of banks are the key elements of
efficiency and efficacy of countries’ financial system.
Operational efficiency is an indicator, which will help not only
the public but to the management, regulators, and supervisors to
understand and judge the relative efficiency of the players
competing in the banking sector. Therefore, this study attempts
to apply CAMEL model on the three listed banks in Kerala in
order to compare their efficiency and solvency position.
Objectives
• To find out how capital adequacy, asset quality, management
soundness, earnings and profitability, liquidity affect the
performance of the bank,
• To analyze the bank’s performance through CAMEL model
Research methodology
Period of the study

Data for the study has been collected from 2 years, 2018 & 2019
Area of study: The study has been done in the listed banks from
Kerala for a period from 2017-2018 to 2018-2019.
Sources of data: Analysis and interpretation has been given
based on data’s collected from secondary sources.
Tools used for the study
Ratio analysis and percentage analysis were used for analysis.
Limitations of the study

•There are lot of qualitative factors that affect the performance
of the bank which is out of the scope of this study.
•The accuracy and reliability of the study depends upon the
correctness of secondary data collected.
Results
Table 1 : CAMEL RATING (2018-2019) CAPITAL ADEQUACY
Capital Coverage Advances to

Debt Equity Group rank
Adequacy Ratio Total assets
Bank Avg Rank Avg Rank Avg Rank Avg Rank Avg Rank
Federal
14.42 1 10.44 1 1.395 1 68.11 1 23.59 2
Bank
South
Indian 12.65 2 15.25 3 1.32 2 66.95 2 24.04 1
Bank
Dhanlax
13.81 3 14.64 2 1.19 3 51.51 3 20.28 3
mi Bank
(Source: Researchers’ Computations)

TABLE 2: CAMEL RATINGS (2018-2019) ASSET QUALITY
Net NPA Gross NPA

Net NPA Total Investment % change
to to Group
to to in
Total Total Rank
Net Assets Total Assets NPA
Advances Advances
Bank Avg Rank Avg Rank Avg Rank Avg Rank Avg Rank Avg Rank
Federal
1.05 1 1.55 1 21.05 1 2.95 1 4.78 1 6.28 2
Bank
South
Indian 1.85 3 2.51 2 21.52 2 3.51 2 0.85 2 6.04 1
Bank
Dhanlax
-
mi 1.35 2 2.8 3 34.51 3 7.71 3 3 9.11 3
0.78
Bank

TABLE 3: CAMEL RATINGS (2018-2019) MANAGEMENT EFFICIENCY
Business
Profit per Credit Return on Group
Per
employee deposit ratio net worth rank
Employee
Federal
18.26 1 8.51 1 81.85 1 8.28 1 29.22 1
Bank
South
Indian 17.56 2 3.78 2 76.85 2 5.51 2 25.92 2
Bank
Dhanlax
mi 9.003 3 0.35 3 57.63 3 -0.885 3 16.52 3
Bank

TABLE: 4 CAMEL RATINGS (2018-2019) EARNINGS QUALITY
NIM to Operating Interest

ROA Total Profit to Income to Group Rank
Assets Assets Total Income
Federal
0.643 1 2.55 1 0.0474 2 0.89 3 1.03 1
Bank
South
Indian 0.003 2 2.25 2 0.0475 1 0.892 2 0.798 2
Bank
Dhanlax
mi 0.002 3 0.03 3 0.045 3 0.925 1 0.250 3
Bank

TABLE: 5 CAMEL RATING (2018-2019) LIQUIDITY POSITION
Liquid assets Govt. Liquid Cash to

Group
to total securities to assets to deposit
ratio
deposit total assets total assets ratio
Federal
0.075 1 0.17 3 0.065 1 7.51 1 1.95 1
Bank
South
Indian 0.055 3 0.185 2 0.05 3 5.88 3 1.54 3
Bank
Dhanlax
0.065 2 0.245 1 0.06 2 6.51 2 1.72 2
mi Bank

TABLE 6: COMPOSITE RATING: CAMEL RATING
Bank C A M E L AVERAGE RANK
FEDERAL
23.59 6.28 29.22 1.03 1.95 12.414 1
BANK
SOUTH
INDIAN 24.04 6.04 25.92 0.798 1.54 11.6676 2
BANK
DHANLAXMI
20.28 9.11 16.52 0.250 1.72 9.576 3
BANK

Discussion
The performance of banks are measured using CAMEL

model and it determines the efficiency of the banks on the
basis of five factors laid down by CAMEL model.
This study has been conducted to examine financial

performance of three listed banks in Kerala during 2018-
2019. This study is based on measuring performance of banks
with respect to CAMEL model and shows that Federal bank
shows the best performance comparing to South Indian bank
and Dhanlaxmi bank .
THANK YOU

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COMPARISON OF OPERATIONAL EFFICIENCY

OF LISTED BANKS FROM KERALA –

The performance of banks has been an issue of major interest for

Period of the study

Limitations of the study

Capital Coverage Advances to

(Source: Researchers’ Computations)

Net NPA Gross NPA

(Source: Researchers’ Computations)

(Source: Researchers’ Computations)

NIM to Operating Interest

(Source: Researchers’ Computations)

Liquid assets Govt. Liquid Cash to

(Source: Researchers’ Computations)

Bank C A M E L AVERAGE RANK

(Source: Researchers’ Computations)

The performance of banks are measured using CAMEL

This study has been conducted to examine financial

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