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

Author

Listed:
  • Babatunde Rahman YUSUF

    (Lagos State University, Lagos, Nigeria)

  • Jamiu Olakunle TIJANI

    (Lagos State University, Lagos, Nigeria)

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.

Suggested Citation

  • Babatunde Rahman YUSUF & Jamiu Olakunle TIJANI, 2019. "An Evaluation of Financial Health of Nigerian Deposit Money Banks using CAMELS Rating Model," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 48-61.
    • Handle: RePEc:ddj:fseeai:y:2019:i:1:p:48-61
    DOI: https://doi.org/10.35219/eai158404097
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    References listed on IDEAS

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    3. Elizabeth M. Samuel, 2018. "Comparative Performance Evaluation of Selected Commercial Banks in India using CAMELS Rating Model," International Journal of Global Sustainability, Macrothink Institute, vol. 2(1), pages 24-38, December.
    4. Dr. Mikail Altan & Habib Yusufazari & Aykut Bedük, 2014. "Performance Analysis of Banks in Turkey Using CAMEL Approach," Proceedings of International Academic Conferences 0902916, International Institute of Social and Economic Sciences.
    5. 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.
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