IDEAS home Printed from https://ideas.repec.org/a/ibn/ibrjnl/v18y2025i1p30.html
   My bibliography  Save this article

Towards Early Critical Warnings of Lebanese Banks: An Analytical CAMELS Study

Author

Listed:
  • Georges Chlela
  • Hasan Mousawi

Abstract

The stability of the Lebanese banking sector has been jeopardized following the financial crisis that unfolded in 2019. This instability manifested through a loss of customer confidence, widespread doubts about the banks’ ability to repay deposits, indirect control over capital, and restrictions on withdrawals, particularly in foreign currencies. As a result, the Lebanese banking sector, once regarded as the backbone of the economy, now faces an existential challenge. The financial health of the country has deteriorated significantly, especially after the Lebanese government declared bankruptcy on euro bonds held by local commercial banks, coupled with the depreciation of the Lebanese pound against foreign currencies. To evaluate the potential for recovery and the challenges ahead, a study of ten Lebanese commercial banks was conducted using the CAMELS model, which examines capital adequacy, asset quality, management quality, profitability, liquidity, and sensitivity to market risk. The findings reveal that by 2022, all assessed banks received a CAMELS score of 4, reflecting the profound financial and economic crisis in Lebanon.

Suggested Citation

  • Georges Chlela & Hasan Mousawi, 2025. "Towards Early Critical Warnings of Lebanese Banks: An Analytical CAMELS Study," International Business Research, Canadian Center of Science and Education, vol. 18(1), pages 1-30, February.
    • Handle: RePEc:ibn:ibrjnl:v:18:y:2025:i:1:p:30
    as

    Download full text from publisher

    File URL: https://ccsenet.org/journal/index.php/ibr/article/download/0/0/51200/55578
    Download Restriction: no
    File URL: https://ccsenet.org/journal/index.php/ibr/article/view/0/51200
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Roger Antoun & Ali Coskun & Bojan Georgievski, 2018. "Determinants of financial performance of banks in Central and Eastern Europe," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(3), pages 513-529, June.
    2. Antoun, Roger & Coskun, Ali & Georgiezski, Bojan, 2018. "Determinants of financial performance of banks in Central and Eastern Europe," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 14(3), May.
    3. Serhat Yuksel & Hasan Dincer Author-Workplace-Associate Professor of Finance, School of Business and Management Sciences & Umit Hacioglu, 2015. "CAMELS-based Determinants for the Credit Rating of Turkish Deposit Banks," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 4(4), pages 01-17, October.
    4. Dania AL-Najjar & Hamzeh F Assous, 2021. "Key determinants of deposits volume using CAMEL rating system: The case of Saudi banks," PLOS ONE, Public Library of Science, vol. 16(12), pages 1-15, December.
    5. Ali Naimi-Sadigh & Tayebeh Asgari & Mohammad Rabiei, 2022. "Digital Transformation in the Value Chain Disruption of Banking Services," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1212-1242, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abayomi Oredegbe, 2020. "Canadian Banking Industry Profitability: Exploring the Relevance of Two Competing Hypotheses," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(4), pages 1-67, April.
    2. Omar Ghazy Aziz & Julie Knutsen, 2019. "The Banks Profitability and Economic Freedom Quality: Empirical Evidence from Arab Economies," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 1(11), pages 96-110, January.
    3. Syed Imran Zaman & Sharfuddin Ahmed Khan & Sahar Qabool & Himanshu Gupta, 2023. "How digitalization in banking improve service supply chain resilience of e-commerce sector? a technological adoption model approach," Operations Management Research, Springer, vol. 16(2), pages 904-930, June.
    4. Serhat Yuksel & Hasan Dincer & Senol Emir, 2017. "Comparing the performance of Turkish deposit banks by using DEMATEL, Grey Relational Analysis (GRA) and MOORA approaches," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 3(2), pages 26-47, December.
    5. Zhao, Guoqing & Bi, Xiaohan & Zhai, Kun & Yuan, Xuemei, 2024. "Influence of digital transformation on banks’ systemic risk in China," Finance Research Letters, Elsevier, vol. 63(C).
    6. Baffour Gyau, Emmanuel & Appiah, Michael & Gyamfi, Bright Akwasi & Achie, Theodoria & Naeem, Muhammad Abubakr, 2024. "Transforming banking: Examining the role of AI technology innovation in boosting banks financial performance," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    7. Changwei Pang & Qiong Wang, 2024. "How Digital Transformation Promotes Disruptive Innovation? Evidence from Chinese Entrepreneurial Firms," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 7788-7818, June.
    8. 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.
    9. Isaac Kofi Mensah & Muhammad Khalil Khan, 2024. "Unified Theory of Acceptance and Use of Technology (UTAUT) Model: Factors Influencing Mobile Banking Services’ Adoption in China," SAGE Open, , vol. 14(1), pages 21582440241, March.
    10. Mirgul Nizaeva & Ali Coskun, 2019. "Investigating the Relationship Between Financial Constraint and Growth of SMEs in South Eastern Europe," SAGE Open, , vol. 9(3), pages 21582440198, September.
    11. Serhat Yuksel & Sinemis Zengin, 2016. "Identifying the Determinants of Interest Rate Risk of the Banks," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 5(6), pages 12-28, October.
    12. Hasan Dincer & Umit Hacioglu & Serhat Yuksel, 2020. "Balanced scorecard-based performance assessment of Turkish banking sector with the Analytic Network Process (ANP)," International Journal of Decision Sciences & Applications (2528-956X), Center for the Strategic Studies in Business and Finance, vol. 1(1), pages 01-12, December.
    13. Sreemanta Sarkar & Debdas Rakshit, 2023. "Factors Influencing the Performance of Commercial Banks: A Dynamic Panel Study on India," FIIB Business Review, , vol. 12(1), pages 85-99, March.
    14. Shang, Xiaoting & Niu, Huayong, 2023. "Does the digital transformation of banks affect green credit?," Finance Research Letters, Elsevier, vol. 58(PB).
    15. Kaushik Mukerjee, 2024. "Augmented reality and customer engagement in the context of e-banking," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(4), pages 1559-1571, December.
    16. Serhat Yüksel & Shahriyar Mukhtarov & Elvin Mammadov & Mustafa Özsarı, 2018. "Determinants of Profitability in the Banking Sector: An Analysis of Post-Soviet Countries," Economies, MDPI, vol. 6(3), pages 1-15, July.
    17. Anna Kwiotkowska, 2024. "The Role of Dynamic Capabilities and Strategic Orientation for Digital Transformation: A Configurational Approach," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 334-356.
    18. Fangyuan Guan & Chuanzhe Liu & Fangming Xie & Huiying Chen, 2019. "Evaluation of the Competitiveness of China’s Commercial Banks Based on the G-CAMELS Evaluation System," Sustainability, MDPI, vol. 11(6), pages 1-24, March.
    19. Michał Grabowski, 2022. "Virtual IBAN as a Service in the Law of the European Union and Poland," JRFM, MDPI, vol. 15(12), pages 1-13, November.
    20. Silim Arafa & Pastory Dickson, 2022. "Effect of treasury single account (TSA) on the financial performance of commercial banks in Tanzania: A study based on CAMEL rating analysis," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(2), pages 172-182, March.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibn:ibrjnl:v:18:y:2025:i:1:p:30. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.