CAMELS Parameters
| CAMELS | RATIO | MEANING |
|---|---|---|
| C Capital adequacy | shareholders equity/total assets | It means the bank's capital adequacy and its ability to deal with losses and face risks. This ratio indicates whether the bank needs external financing to support the capital in the event of its decline |
| A Asset quality | Non-performing loan/total assets | It is the amount of risky and non-performing assets owned by the bank and is determined as a percentage of total assets |
| M Management soundness | Cost to income | It is the management's ability to achieve the highest income at the lowest costs, and this is an indication of the management's efficiency in dealing with conditions and risk factors |
| E Earnings | ROA | This ratio is the profitability of the bank, as it is the bank's ability to regularly earn income from its activities |
| L Liquidity | Loan to deposit | It is the ability of the bank to meet its obligations as they arise |
| CAMELS | RATIO | MEANING |
|---|---|---|
| C | shareholders equity/total assets | It means the bank's capital adequacy and its ability to deal with losses and face risks. This ratio indicates whether the bank needs external financing to support the capital in the event of its decline |
| A | Non-performing loan/total assets | It is the amount of risky and non-performing assets owned by the bank and is determined as a percentage of total assets |
| M | Cost to income | It is the management's ability to achieve the highest income at the lowest costs, and this is an indication of the management's efficiency in dealing with conditions and risk factors |
| E | ROA | This ratio is the profitability of the bank, as it is the bank's ability to regularly earn income from its activities |
| L | Loan to deposit | It is the ability of the bank to meet its obligations as they arise |
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