Financial and Operational Performances of Commercial Bank of Ethiopia

Abstract

This study was focused on the area of financial and operational performance analysis of commercial bank of Ethiopia by using CAMEL model. The study was conducted on financial statements of Commercial Bank of Ethiopia during the study period of 2014 to 2016. The overall objective of this study was to analyze the effects of CAMEL variables under this study based on their financial and operational performances. The study used quantitative approach. This study used CAMEL variables and descriptive statics for CAMEL ratios. Descriptive part was analyzed by descriptive analysis. The analysis showed that, capital adequacy, asset quality, management efficiency, earning quality and liquidity explain the financial performances of the bank. In general for bank’s whose capital adequacy, asset quality, management efficiency and liquidity position were low as compared to peer bank’s shall inject some capital, improve their asset quality, control their cost and control their liquidity position respectively in order not lose public trust. The banks shall give special attentions to asset quality, management efficiency, liquidity and net interest margin. The bank shall also concentrate on increasing their total asset by mobilizing deposit and converting the deposit to loan, as total asset.