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The Safety of Banks in Vietnam Using CAMEL

Author

Listed:
  • 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)

  • Michael McAleer

    (Department of Finance, College of Management, Department of Bioinformatics and Medical Engineering, College of Information and Electrical Engineering, Asia University, Taiwan)

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.

Suggested Citation

  • Do Thi Thanh Nhan & Kim-Hung Pho & Dang Thi Van Anh & Michael McAleer, 2021. "The Safety of Banks in Vietnam Using CAMEL," Advances in Decision Sciences, Asia University, Taiwan, vol. 25(2), pages 158-192, June.
    • Handle: RePEc:aag:wpaper:v:25:y:2021:i:2:p:158-192
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    References listed on IDEAS

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    1. B S Bodla & Richa Verma, 2006. "Evaluating Performance Of Banks Through Camel Model: A Case Study Of Sbi And Icici," The IUP Journal of Bank Management, IUP Publications, vol. 0(3), pages 49-63, August.
    2. Simon Kwan & Robert Eisenbeis, 1997. "Bank Risk, Capitalization, and Operating Efficiency," Journal of Financial Services Research, Springer;Western Finance Association, vol. 12(2), pages 117-131, October.
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    Cited by:

    1. Le Ngoc Thuy Trang & Do Thi Thanh Nhan & Nguyen Thi Nhu Hao & Wing-Keung Wong, 2021. "Does Bank Liquidity Risk Lead To Bank'S Operational Efficiency? A Study In Vietnam," Advances in Decision Sciences, Asia University, Taiwan, vol. 25(4), pages 46-88, December.

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    More about this item

    Keywords

    CAMEL method; Analyze; Vietnam; Banks.;
    All these keywords.

    JEL classification:

    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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