ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS & ECONOMICS

DEPARTMENT OF BUSINESS ADMINSTRATION IN FINANCE

EVALUATION OF FINANCIAL PERFORMANCE OF PRIVATE

COMMERCIAL BANKS IN ETHIOPIA

BY

KINDU ASCHALEW BELAY

OCTOBER, 2020

ADDIS ABABA, ETHIOPIA

i
 ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS & ECONOMICS

DEPARTMENT OF BUSINESS ADMINISTRATION

Evaluation of Financial Performance of Private Commercial Banks in

Ethiopia

By

Kindu Aschalew Belay

Advisor

Degefe Duressa (PhD)

A Thesis Submitted To the Department of Business Administration

College of Business and Economics, Addis Ababa University in Partial

Fulfillment of Requirements for the degree of Master of Business
Administration Specialized in Finance

OCTOBER, 2020

ADDIS ABABA, ETHIOPIA

ii
 Statement of Declaration

I, hereby declare that this thesis is my own original work and all sources and works of others
used as reference have been duly acknowledged. The thesis has not been accepted for any
degree, diploma or other academic award in any university or college

Name Kindu Aschalew Belay

Signature __________________
Date______________________

iii
 Addis Ababa University

School of Graduate Studies

This is to certify that Kindu Aschalew has, carried out a thesis on topic entitled: Evaluation of
Financial Performance of Private commercial Banks in Ethiopia in partial fulfillment of the
requirement for the degree of Master of Business Administration (MBA) in compliance with the
regulation of the university and meets the accepted standards with respect to originality and
quality

Examined by

Internal Examiner Signature _____________Date________________

External Examiner Signature _____________Date________________

Advisor Degefe Duressa (PhD) Signature ___________ Date________________

____________________________________________________________

Chair of Department of Business Administration

iv
 Acknowledgements

There are a number of bodies whom I am profoundly grateful for their invaluable helps in
successfully completing this thesis. To this end, my primary thanks go to the Almighty God who
enabled me to be strong, skillful and disciplined to make it successfully happen.

Secondly, I would like to express my gratitude and appreciation for my advisor Dr. Degefe
Duressa for his invaluable support, guidance and encouragement during the entire course of this
thesis work without whom the completion of the thesis would have been impossible.

Still, I would like to add my thanks to my family members particularly my mother, my sister, and
my brothers for their usual motivation and encouragements. Here, among the family members, I
have a special person whom I am extremely grateful to i.e., my darling, Helen Assefa who
remained on my side with great patience and encouragement throughout the work.

Finally, my heartfelt thanks go to my friends especially Dr Biniam Atnafe, Mr Megerisa,

Chinkilo, Xiqo and other friends, whose names are not listed here who helped me in the course of
this thesis one way or the other until this thesis work was completed.

i
 Table of Contents
Contents Page
Acknowledgements .......................................................................................................................... i

Table of Contents ............................................................................................................................ ii

List of Tables ................................................................................................................................. vi

List of Acronyms ......................................................................................................................... viii

Abstract .......................................................................................................................................... ix

CHAPTER ONE ............................................................................................................................. 1

1. Introduction ................................................................................................................................. 1

1.1 Background of the study ....................................................................................................... 1

1.2 Overview of the Ethiopian banking System .......................................................................... 3

1.3 Statement of the problem ...................................................................................................... 4

1.4 Objectives of the Study ......................................................................................................... 4

1.4.1 General Objective of the Study ...................................................................................... 4

1.4.2 Specific Objective of the Study ...................................................................................... 5

1.5 Literature Driven Hypothesis ................................................................................................ 5

1.6 Significance of the Study ...................................................................................................... 5

1.7 Scope And Limitation of the Study ....................................................................................... 6

1.8 Organization of the study ...................................................................................................... 6

CHAPTER TWO ............................................................................................................................ 7

2. Review of Literature ................................................................................................................... 7

2.1. Introduction .......................................................................................................................... 7

2.2 Evolution of CAMEL Framework ........................................................................................ 9

2.2.1 Capital Adequacy ......................................................................................................... 10

2.2.2 Asset quality ................................................................................................................. 11

2.2.3 Management efficiency ................................................................................................ 13

ii
 2.2.4. Earning Ability ............................................................................................................ 14

2.2.5 Liquidity ....................................................................................................................... 15

2.3 Empirical Review ................................................................................................................ 16

2.4 Conclusion and research Gap .............................................................................................. 19

CHAPTER THREE ...................................................................................................................... 20

3. Research Design and Methodology .......................................................................................... 20

3.1 Research Design .................................................................................................................. 20

3.2 Target population ................................................................................................................ 20

3.3 Sample size and sampling method ...................................................................................... 20

3.4 Data collection method........................................................................................................ 21

3.5 The variables ....................................................................................................................... 21

3.5.1 Dependent variable of the study ................................................................................... 21

3.5.2 Independent variable of the study................................................................................. 22

3.6 Model Specification ............................................................................................................ 23

3.7 Method of Data Analysis .................................................................................................... 24

CHAPTER FOUR ......................................................................................................................... 25

Analysis and Discussion ............................................................................................................... 25

4 Descriptive Analysis .................................................................................................................. 25

4.1 Capital Adequacy ................................................................................................................ 25

4.1.1 Capital adequacy ratio .................................................................................................. 25

4.1.2 Debt Equity Ratio ......................................................................................................... 25

4.1.3 Loan and Advance to Asset Ratio ................................................................................ 26

4.1.4 Composite Capital Adequacy ....................................................................................... 26

4.2 Asset Quality ....................................................................................................................... 26

4.2.1 Non Performing loan to Total Asset ............................................................................. 26

iii
 4.2.2 None performing loan to Total Loan and Advance ...................................................... 27

4.2.3 None performing loan to Equity ................................................................................... 27

4.2.4 Composite Asset Quality .............................................................................................. 27

4.3 Management efficiency ....................................................................................................... 27

4.3.1 None Interest Expense to Operating Income ................................................................ 27

4.3.2 Loan and Advance to Total Deposit ............................................................................. 28

4.3.3 Net profit per Employee ............................................................................................... 28

4.3.4 Business per employee ................................................................................................. 28

4.3.5 Composite Management Efficiency ............................................................................. 29

4.4 Earning Ability .................................................................................................................... 29

4.4.1 Net Interest Margin (NIM) to Total Assets .................................................................. 29

4.4.2 Net Profit to Total Assets (ROA) ..................................................................................... 29

4.4.3 Percentage growth in Net Profit ................................................................................... 29

4.4.4 Operating profit to total asset ratio ............................................................................... 30

4.4.5 Interest Income to Total Income ................................................................................... 30

4.4.6 Composite Earning Quality .......................................................................................... 30

4.5 Liquidity .............................................................................................................................. 30

4.5.1 Liquid Assets to Demand Deposits .............................................................................. 31

4.5.2 Liquid Assets to Total Deposits.................................................................................... 31

4.5.3 Liquid Assets to Total Assets ....................................................................................... 31

4.5.4 Term Deposit to Total Deposit ..................................................................................... 31

4.5.5 Composite liquidity ...................................................................................................... 31

4.5.6 Composite CAMEL ...................................................................................................... 32

4.6 Econometrics analysis ......................................................................................................... 32

4.6.1 Descriptive statistics ..................................................................................................... 32

iv
 4.7 Test of multi co linearity ..................................................................................................... 33

4.8 Test of auto correlation ....................................................................................................... 34

4.9 Test of Normality ............................................................................................................... 35

4.10 Tests of Heteroscedasticity............................................................................................... 36

4.11 Fixed effect Regression Analysis of ROA ........................................................................ 37

4.12 Fixed effect Regression Analysis of ROE......................................................................... 39

4.13 Discussion Hypothesis ...................................................................................................... 40

CHAPTER FIVE .......................................................................................................................... 42

5 Summery, Conclusion and Recommendations .......................................................................... 42

5.1 Summery ............................................................................................................................. 42

5.2 Conclusion........................................................................................................................... 45

5.3 Recommendations ............................................................................................................... 46

References ..................................................................................................................................... 48

Annex 1 List of commercial banks operating in Ethiopia ............................................................ 66

Annex 2 Lists of Commercial Banks under formation ................................................................. 67

Annex 3 Ratio used for Econometrics Analysis ........................................................................... 68

v
 List of Tables
Table 2.1capital Ratio Analysis Formula...................................................................................... 11

Table 2.2Asset Quality Ratios Analysis Formula ......................................................................... 12

Table2.3Management efficiency ratio analysis formula. .............................................................. 14

Table 2.4 earning Ability ratio Analysis ....................................................................................... 15

Table 2.5 Liquidity Ratio Analysis ............................................................................................... 16

Table 4.1 Capital Adequacy Ratio ................................................................................................ 53

Table 4.2 Debt Equity Ratio ......................................................................................................... 53

Table 4.3 Loan and Advance to Asset Ratio (Percentage) ........................................................... 54

Table 4.4 Composite Capital Adequacy ....................................................................................... 54

Table 4.5 Provision for NPL to Total Asset ................................................................................. 55

Table 4.6 Provision for NPL to Total Loan .................................................................................. 55

Table 4.7 Provision for NPL to Equity Percentage....................................................................... 56

Table 4.8 Composite Ratio for Asset Quality ............................................................................... 56

Table 4.9 None Int. Expense to Net Income & Other Income ...................................................... 57

Table 4.10 Net Profit per EMPL ................................................................................................... 57

Table 4.11 Business Function per Employee ................................................................................ 58

Table 4.12 Advance to Total Deposit ........................................................................................... 58

Table 4.13 Composite of management Efficiency ........................................................................ 59

Table 4.14 NIM per To T Asset .................................................................................................... 59

Table 4.15 Net Profit to Asset....................................................................................................... 60

Table 4.16 Net Profit Growth ....................................................................................................... 60

Table 4.17 Operating Income to Total Asset ................................................................................ 61

Table 4.18 Interest Income to Total Income ................................................................................. 61

Table 4.19 Composite Earning Quality Ratio ............................................................................... 62

vi
Table 4.20 Liquid Asset to Demand Deposit ................................................................................ 62

Table 4.21 Liquid Asset to Total Deposit ..................................................................................... 63

Table 4.22 Liquid Assets to Total Assets ..................................................................................... 63

Table 4.23 Term Deposits to Total Deposit .................................................................................. 64

Table 4.24 Composite Liquidity Ratio.......................................................................................... 64

Table 4.25 Composite of CAMEL ................................................................................................ 65

Table 4.26 descriptive statistics .................................................................................................... 32

Table 4.27 Correlation matrix of Independent Variables ............................................................. 34

Table 4.28 Test of auto correlation ............................................................................................... 35

Table 4.29 tests of normality ROA ............................................................................................... 36

Table 4.30 tests of normality ROE ............................................................................................... 36

Table 4.31 Heteroscedasticity tests ............................................................................................... 37

Table 4.32 Regression Analysis of ROA ...................................................................................... 37

Table 4.33 Regression Analysis of ROE ...................................................................................... 39

vii
 List of Acronyms
DEA ………… Data Envelopment Analysis
UFIRS………..US Federal Reserve and the Uniform Financial Institutions Rating System
CBE …………..Commercial Bank of Ethiopia
CLSA…………Credit Leona‟s Securities Asia
LDCs ………… least developed countries
DMUs………. .Decision making unit
CAMEL…… Capital adequacy, Asset quality, earning ability and liquidity
CAR………….The ratio of total capital to total asset
AQ……………The ratio of Asset Quality

NPL…………..None performing loan

MGTQ……….The ratio of Management quality

ERNQ……….The ratio of none interest expenditure to total income

LIQ…………..The ratio of liquid Asset to total Deposit

NIM ………...Net interest margin

ROA………….Return on Asset
PAT………….Profit after tax
ROE………….Return on Equity
BOA …………Bank of Abyssinia
CBO……….…Cooperative bank of Oromia
DB…………....Dashin bank
DGB………….Debub Global bank
BIB…………...Birhan International bank
NIB……….......Nib international bank
OIB……………Oromia international bank
UD……………United bank
ZB…………….Zamen Bank

viii
 Abstract
This study aimed at evaluating and analyzing the financial performance of the banking sectors in
Ethiopia with special reference to private commercial banks. In conducting the study, CAMEL
approach was employed. The study considered all private commercial banks for the period 2015
to 2019. To achieve the purpose of the study, secondary data were used. Annual financial reports
of the bank were used as a main source of the data. . The overall objective of this study was to
find out the effect of explanatory variables such as: Capital adequacy, Asset quality,
Management efficiency, Earning ability, Liquidity, Net interest margin and Bank size on
profitability measurement. In other words, the study was carried out to see the effect of
explanatory variables on the return asset and return on equity which is employed to evaluate and
rank banks based on the composite CAMEL rate results. The study employed quantitative
approach, i.e., ROA and ROE were used as dependent variables whereas CAR, AQ, MGTQ,
ERNQ, LIQ, NIM and Bank SIZE were taken as independent variable. Measurable apparatus
such as descriptive statistics, Correlation matrix, and regression analysis were used to estimate
the execution of banks. Fixed effect regression analysis model was employed to test and
determine the relative importance of each explanatory variable to explain the dependent
variable. The result of composite CAMEL showed that Addis international, ENAT and Buna
banks were ranked from 1st to 3rd respectively whereas, Oromia international bank took the least
place. From fixed effect regression analysis i.e., Asset quality and management efficiency were
found to be significantly and negatively correlated to the return on asset. On the other hand,
liquidity net interest margin and bank size were found to be significantly and positively
correlated with ROA, whereas, capital adequacy and earning quality were found to be statically
insignificant to ROA. Similarly, capital adequacy and management efficiency ratio were found to
be significantly and negatively correlated to ROE. But net interest margin, liquidity and bank
size were found to be significantly and positively correlated to ROE whereas, Asset quality and
earning ability ratio were found to be statistically insignificant with the banks’ performance.
Based on the findings from the study, recommendations were forwarded.

Key Words CAMEL, Financial Performance

ix
 CHAPTER ONE

1. Introduction

1.1 Background of the study

Economic prosperity is the sign of success of a country and it is achieved through proper and
efficient utilization of a country‟s resources. In this context, banking sector is a major constituent
that enables effective and appropriate utilization of financial resources of the country Babar
Hz,Zeb G (2011) .Commercial Banks play a dynamic role in the economic development of the
country. Financial sector works as the spine of the economy that controls the money supply and
demand. Banks Collect funds from surplus monetary units as deposits and handover it to
Business and Industries as advances. Banking is a very significant sector because the
development of the finance, and particularly the banking system, support up economic growth.
Banks are fundamental for the economy and organizations in particular at the time of declines
and money related disaster. Industrial, agricultural and commercial development of a country is
unthinkable without an efficient banking system. Sometimes bank truly don't respond to the
crisis, comparing the later past financial crisis 2007-09, it makes the condition more terrible for
economic improvement. Therefore, it is significant to observe the performance of the banks with
the administrative prerequisites Babar Hz, Zeb G (2011) The banking sector has attracted a huge
amount of investments and expanded to a great extent. In this day and age banks are not only
restricted to financial intermediary services, but also concerned in providing specialized services
to their customers in order to meet ever changing customer needs as the banking industry is
innovating rapidly Dang (2011).

Sunderjan (2012) argues that the financial system, the bank in particular, is exposed to a variety
of risks such that liquidity risk related to inability to meet current demand, credit risk which is a
default occurs when a borrower does not make the obligated interest and principal payments in a
timely manner, interest rate risk- the possibility that the bank will become unsuccessful, if
growing interest rates force it to pay relatively more on its deposits than it receives on its loans.
Zawadi (2013) and Mohiuddin (2014) stated that Sound financial health of a bank is the
guarantee not only to its depositors but is equally important for the shareholders, employees and
whole economy as well. Furthermore, the economic downturn of 2008 which resulted in bank

1
failures, are triggered in the U.S. and then wildly spread worldwide. It therefore increasingly
urges the need of more regular banking assessment. In order to handle with the complication and
a mix of risk exposure to banking system accurately, responsibly, constructively and sustainably,
it is of great importance to evaluate the overall performance of banks.

According to Ibrahim (2014) there are different types of stakeholders that have interest in the
evaluation of banks performance including depositors, investor‟s bank managers and regulators.
For instance central banks and bank regulators may need to identify and call attention to banks
that are experiencing chronic financial problems in order that they may fix them before they get
out of control. On the other hand share holders need to asses which banks they can deem suitable
for financially invest in. The banks evaluate their own performance over a given period of time
so that they may determine the efficiency and long term viability of management decision or
goals so that they can adjust the course and make changes whenever it is appropriate.

There are different approaches appropriate by different regulatory bodies to evaluate financial
performance of banks like Data Envelopment Analysis (DEA), CAMEL model and Ratio
analysis, etc. Among those approaches, most preferred parameters used by the regulators and
different scholars is CAMEL (capital adequacy, asset quality, management quality, earnings and
liquidity) rating criterion to assess and evaluate the performance and financial reliability of the
activities of the bank.

The CAMEL Model was developed in 1979. This model is recommended by the US Federal
Reserve and the Uniform Financial Institutions Rating System (UFIRS). This model was
employed in the US financial institutions and then all around the world. It consists of five
indicators that are Capital adequacy, Asset quality, Management efficiency, Earnings &
Profitability and Liquidity. This framework give emphasizes on the five parameters of the
banking system by looking at its profit and loss statement to appraise financial performance and
balance sheet to assess the financial position of the bank Tom K.A, (2012). CAMEL model is
basically a methodology commonly used to measure the performance of banking segment in and
outside Ethiopia. The different researchers have analyzed the overall financial performance of
major private sector banks in Ethiopia through the application of CAMEL model Anteneh, Arega
and Yonas, (2011).Mulualem (2015).AntenehTeshome (2018).

2
1.2 Overview of the Ethiopian banking System
The modern banking in Ethiopia were started after the establishment of the Abyssinian Bank in
1905.In that time all banks and insurances owned by foreigner until the Abyssinian Bank was
state-owned in 1931 and renamed the Bank of Ethiopia, thereby becoming the first bank to be
nationally owned in Africa Belay Gedey, (1990: 83);, Befekadu Degefe (1995: 234).In 1943 the
State Bank of Ethiopia was founded, even with substantial British resistance Befekadu Degefe
(1995), for an interesting neo-colonial story. Resistance to foreign control of the financial system
has therefore been a longstanding theme in Ethiopia's banking history, including arguments by
the countries famous economist in the last century - Gebre-Hiwot Baykedagn in 1920s.

Until it was dissolved to form the central bank the State Bank of Ethiopia operated as both a
commercial and central bank since 1963,the National Bank of Ethiopia (NBE), and the
Commercial Bank of Ethiopia (CBE). A a lot of other private financial institutions were also
established during the 1960s. The formation of Ethiopia's financial system consequently
resembled that of other African countries at this time until the remove from power of the
monarchy Emperor Haile Silassie in 1974.

As stated in (Degefa 1995 cited Geda in2006) all privately owned financial institution including
three commercial banks, thirteen insurance companies and two none bank financial
intermediaries were nationalized on 1, January 1975. The national banks were recognized one
commercial banks(CBE), a national bank ( reacted in1976 ),two specialized banks i.e.
agricultural and industrial banks, renamed recently the development bank of Ethiopia and a
Housing and saving banks ,renamed recently as CBB construction and business bank currently
merged with CBE and one insurance company (Ethiopian insurance company).

Following the change of government, in 1991 Ethiopia re-opened its doors to private investors
(limiting to Ethiopian nationals) to participate in the financial sector. Also, like many least
developed countries (LDCs), Ethiopia has also been engaged in structuring and restructuring of
its various institutions since 1992.As a result, the Ethiopian banking sector is currently
comprised of central bank, (NBE),two government owned banks and sixteen private banks.

3
1.3 Statement of the problem
Finance is blood of trade; commerce and it plays the role of veins in the Circulation of the funds
in economy. The most important development of any country depends upon the wellbeing of
banking system. Especially in countries such as Ethiopia, where stock and corporate bond
market are usually not implemented, the major financial resources are allocated through banks.
Current Commercial banking is the main characters of present economy as it makes flow of the
resource, pillar of the financial system it provide different opportunity and services to clients.
The private commercial banks are the major parts of banking sector in terms of market share and
profitability in Ethiopia with high profit growth. The intensive and continuously increasing
competition in the financial services market creates a need for an access to information that
would allow evaluating commercial banks operating in such market.

Therefore, financial performance of the banks is one of the major characteristics that identify
Competitiveness potentials of the business, economic interests of the company‟s management
and reliability of present or future contractors. As a result, financial performance analysis and
identification of their weaknesses and strengths using financial performance indicators has its
contribution to the management, shareholders, the public (customers of the bank). In today‟s
scenario, modern banking sector is becoming more complex than before. For instance, in 2017
banks in Ethiopia faced several challenges including foreign exchange-related issue and local
political unrest. Despite the problems, the banking sector posted its highest growth rate in six
years with high competition in the industry. In addition to this, the present political commitment
to open the financial sector for foreign stakeholders and other forms of banking services, namely
the interest free banking service, is also expected to result more competition. Therefore, there is a
strong need to evaluate the performance of the banks so as to make sure that the vital sector of
the economy is performing well.

1.4 Objectives of the Study

1.4.1 General Objective of the Study
The main objective of this research was to evaluate, analyze and measure the overall financial
performance of Ethiopian private commercial banks registered by NBE based on CAMEL frame
work approaches over the period of 2015-2019.

4
1.4.2 Specific Objective of the Study

1. To determine whether CAMEL component, bank size and NIM have statistically
significant impact on financial performance (ROA) of Ethiopian private commercial
banks.
2. To assess the extent to which CAMEL component, bank size and NIM have statistically
significant impact on financial performance (ROE) of Ethiopian private sector
commercial banks.

1.5 Literature Driven Hypothesis

In Order to achieve the research objective and based on the literature review the following
hypothesis have been proposed for the study which are.

H1: Capital Adequacy has significant impact on performance of private Commercial banks.
H2: Asset quality has significant impact on performance of private Commercial banks
H3: Management Efficiency has significant impact on performance of private Commercial banks
H4: Earning Ability has significant impact on performance of private Commercial banks.
H5; Liquidity of has Significant impact on performance of private Commercial banks
H6; Bank sizes has significant impact on performance of private Commercial banks
H7; Net interest margin has Significant impact on performance of private Commercial banks

1.6 Significance of the Study

The study is expected to generate the following benefits: First and for most the findings and
recommendations of the study would provide a vital information for the top level management
who design and administer organization productivity, growth and performance of private banks
on the area of financial performance which needs improvement. Furthermore, it gives insight
about the current situation and performance of banks to regulatory bodies, share holders and
investors. Besides, it also aids other researchers as reference for further investigation on issues
which are related to these topics.

5
1.7 Scope And Limitation of the Study

This research was designed to evaluate the financial performance of private commercial banks
using the CAMEL frame work. The time period of the study covers five years data from 2015 to
2019.As a result the study exclude the giant government bank Commercial bank of Ethiopia
(CBE) and the researcher was limited to accesses the non performing loan data due to its
confidentiality instead used provision for non performing loan.

1.8 Organization of the study

The study prearranged under the following chapter arrangement, chapter one is introduction
which consists of statement of the problem, objective of the research, Hypothesis of the research,
significant and scope of the research. Chapter two include literature review about CAMEL both
theoretical and empirical parts. Chapter Three is about research design and methodology. This
chapter is take account of data source, sampling technique, data analysis, and model of the
research. Chapter four is concerning about the analysis of the result and the findings. And the last
chapter will summarize the research by forwarding conclusion and recommendation.

6
 CHAPTER TWO

2. Review of Literature
2.1. Introduction

Bank is a financial intermediary that channels funds from the surplus units, the depositor, to the
deficit units, the borrowers, in the process gaining from the spread of the different interest
charged. By the scope of their function, banks are keys to economic growth of a country (Rashid,
2010). And, they are fundamental Components of the financial system, further more they are
active participant in the financial market (Guisse, 2012).The essential role of the bank is to
connect those who have a capital with those who seek a capital. Banks have a control over a
large part of a supply of money in circulation. All the way through their influence over the
volume of bank money, they can influence nature and character of production in any country
(Brigham and Houston, 2009).

A single bank is highly connected with other banks for a payment and other function. A failure
of one bank affects not only the owners and creditors but also the rest of the banks and even all
other business (Kumbirai and Webb, 2010).The failure of a single bank creates an economic
turmoil and is regarded as a catastrophe for the economy.

The recent global recession is also an example of economic disaster that occurred for the failure
of the banking business. So the government of any country must have a high concern about the
performance of banks (Searle, 2008). Certainly, performance means different things to different
stakeholders in a bank. For example, depositors are interested in a bank‟s long-term ability to
look after their savings; their interests are safeguarded by supervisory authorities. Share holders,
for their part, focus on profit generation i.e. on ensuring a prospect return on their current
investment (European Central Bank, 2010). The European Central Bank report, 2010, defined
bank performance as its capacity to generate sustainable profitability. It stated, subsequent to the
spectacular losses in the financial crisis and the substantial government intervention, there is
little public support for banks return on equity (ROE) ratios of well above 20%, as these have
mostly proved to be unsustainable (European Central Bank, 2010). The report also specified that
the most common measure for a bank‟s performance, ROE, is only part of the story, as a good

7
level of ROE may either be a sign of a good level of profitability or more inadequate equity
capital. This may create clear why some of the high return on equity firms have performed
particularly poorly over the crisis, dragged down by a rapid leverage adjustment. It is
understandable that a more comprehensive analysis covering multiple aspects of performance is
necessary to assess the overall financial health of banks. Good financial performance of banks is
important not only to their shareholders but to the whole economy as it helps the banks to
continue their role of financial intermediation effectively and help economic growth of a country,
especially in countries like Ethiopia where financial markets are not well developed.

Bank performance is highly influenced by both internal and external factors. The internal factors
are within the scope of the bank easy to manipulated and differ from bank to bank. It includes
bank size, capital adequacy, management quality and risk management capacity (Vincent Okoth,
2013). According to Athanasoglou et al;(2006) argument the profitability is a function of internal
factor that are influenced by banks management decision and policy objectives such as the level
of provisioning policy, capital adequacy expense management and bank size on the other hand
external factors are macroeconomic variables such as interest rates ,inflation economic growth
and other factors like ownership (Vincent Okoth , 2013).

There are different approaches or Models used by different regulatory bodies and researchers to
evaluate banks performance. Among those, Data Envelopment Analysis (DEA) is one of the
measurements of bank performance which is used to measure production or performance
function of decision making unit (DMUs). It evaluates the input consumed and the output
produced by DMUs and identifies those units that comprise an efficient frontier and those lies
below the frontier. The other model for bank performance analysis is Z score. The Z score was
first developed by New York University professor Edward Altman in 1968 (Wikipedia). The Z
score methodology was developed to provide a more effective financial assessment tools for
credit risk analysts and lenders. The method claims more than 70% accuracy in predicting
corporate bankruptcy Nishi Sharma & Mayanka (2013).

Recently most scholars and researchers preferred CAMELS parameters for evaluation of bank
performance. This rating system is a supervisory rating system first developed in the U.S to label
banks‟ over all condition. It has been functional to every bank and credit union (approximately in
8000 institutions) Siti Nurian Mohamad (2017). Each of the component factors rated on scales of

8
1 (Best) to 5 (worst). According to Wirnkar and Tank,(2008) as cited on Gulgzoztorul (2011),
rate 1 stands for sound in every respect a rate of 2 sound but has modest weakness, 3 indicates
weakness,4 implies series weakness and finally 5 indicates us a critical weakness. According to
Andreas & Gabrielle (2009), bank profitability usually measured by internal determinants which
include bank specific variables. However, the main focus of this specific study is to find out the
impact of bank specific factors on banks performance.

2.2 Evolution of CAMEL Framework

The task of quantitative analysis of financial state of a bank always ought to start with choosing
criteria of the evaluation. Criteria must comprise the essence of evaluation and should not miss
valuable characteristics of the object evaluated. In order to obtain unbiased results, a set of
criteria must not be overwhelming and criteria must not correlate between themselves. We found
it the most appropriate to use the approved and extensively used so-called CAMELS framework,
which sets and outlines categories of bank stability and soundness. The set of categories
characterizing stability and soundness of banks based on the CAMELS rating frame was chosen.
It is extensively used by regulators of banking industry in the U.S.A. namely the FDIC, the
Federal Reserve and the OCC Lopez (1999); Podviezko, Ginevičius (2010) and by major rating
agencies.

At the beginning of the employing of a CAMEL rating system the evaluation used the rating
system from 1to 5 in each CAMEL category (capital adequacy, asset quality, management
competency, earning quality, liquidity). Rating 1 indicates strong performance while rating 5
indicates unsatisfactory. The rating system is intended to replicate all considerable financial and
operational factors in assessing the performance of the institution which used the combination of
financial ratio. (Swindle, C.S. 1995) used CAMEL rating system to evaluate whether regulators
in the 1980s influenced inadequately capitalized banks to improve their capital by using the
component of capital adequacy. Other researcher such as Nimalathasan, B.,( 2008) and Dash, M.
and A. Das, (2009 ) continuously used the CAMEL rating system. Apart from using the rating
system, researchers also employed the CAMEL framework by using solvency bank meter and
CLSA stress test parameters as a method to assess bank performance Shar, A.H., M.A. Shah and
H. Jamali, (2010). However, the most common method used by researchers nowadays to
evaluate bank performance is by employing the financial ratio analysis using each component of

9
the CAMEL frame work. Kouser, R. and I. Saba,( 2012),Roman, A. and A.C. Sargu,( 2013).The
CAMEL framework is among the popular methods to assess the financial soundness of banks
Ginting, D.P. and T.S. Zen, (2015) and it is still applicable for current studies despite have been
designed almost 30 years ago.

Barr et al (2002 p.19) discussed that “CAMEL ranking method has become a brief and crucial
means for investigators and regulators”. This ranking procedure garneted a bank‟s healthy
conditions by reviewing different aspects of a bank based on multiplicity of information sources
such as financial statement, funding sources, macroeconomic data, budget and cash flow.
Nevertheless, Hirtle and Lopez (1999, p. 4) confirmed that that the bank‟s CAMEL rating
method is highly classified, and only showing to the bank‟s senior management for the purpose
of planning the business strategies, and to appropriate supervisory staff.

2.2.1 Capital Adequacy

The deference between total assets and total liabilities is called capital or owners‟ equity. It
shows capability of the firm that liability could be privileged. It assumes that if all the assets of
the bank take as a loans and deposits as liability. If there is any loss from loans it will be a huge
risk for banks to congregate the claim of their depositors. Chen, (2003, P. 21).stated that to avoid
the bank from failure it is necessary to preserve a significant level of capital adequacy Basel
capital accord set the convention for the Capital requirements; it represents the capital standard
for banks which practical to banks in G10 countries. The Basel capital has two parts. These are,
Tier one, and Tier two (Chen, 2003, P. 21). The capital adequacy ratio for banking institutions
should be superior to 8% or we can say that the total capital must be over 8% of its risk weighted
assets. The formula for Capital Adequacy ratio is; CAR= (TIER I+TIER II)/(RISK-
WEIGHTED ASSETS).This ratio determines the ability of the bank to meet with obligation on
time and other risk such as operational risk and credit risk etc.

TIER I:Tier one is a type of capital, it is a composed core capital or we can say own capital
which consist primarily of common stock, preferred stock, convertible bonds and retain earning.

TIER II:It is a supplementary form of bank‟s capital. Tier II also known as hybrid because it
includes that amount which is derived from issued bonds by the banks. These amounts reduced
guarantees to buyers because these are of long-term in nature. Tier I should be at least half of the

10
total amount the numerator. There is a great chance of better bank‟s capital adequacy if there is a
higher value of index, because of this institution can totally rely on self-financing Christopoulos,
et al,( 2011, p. 12).

Debt equity ratio (leverage ratio) represents the degree of leverage of a bank. It shows how much
proportion of banks business is financed through equity and how much is though debt .it is
calculating by dividing the sum of total borrowing and deposits with shareholders net worth.
Higher the ratio is an indication of less protection for depositors and creditors and lower ratio is
seen as a better performance of the bank.Misra and Aspal (2013). On the other hand Advance to
asset ratio indicates the proportion of loan and advances deployed to the total funds. A higher the
ratio a better is the a availability of funds for loan advance for loan and advances out of their
total asset and vice versa.JayantaK (2012)

The capital Adequacy is estimated based up on the following financial ratio

Table 2.1capital Ratio Analysis Formula

Ratio Formula
Capital Adequacy ratio

capital to total asset

Leverage ratio

2.2.2 Asset quality

According to Jerome, (2008, p. 6) Asset quality is one of the most important components of
CAMELS frame work to rate and evaluate a banks. Decision concerning allocation of the
deposited amount of the bank in loan portfolio, investments, owned real estate, securities and off
balance sheet operation determines the quality of its assets. These are taken into consideration
while calculating the default risk of a bank. Quality of these assets indicates the future losses to
the bank and its ability to overcome these unanticipated loses.

11
The working paper submitted By Sundararajan and Errico (2002) to International Monetary Fund
(IMF) stated that how asset quality is assessed in standard CAMELS rating framework. A they
mentioned the quality of asset is measured on the following four classifications: (1) intensity,
allocation and rigorousness of classified assets (2) level and composition of nonperforming
assets (3) the competence of estimating reserves and (4) the established capabilities to manage
and collect bad debts.

There are several other quantitative factors that can lead to the collapse of a financial institution
but corrosion in the quality of assets is the root cause where problem starts. Deterioration and
improvement in the quality of assets is the main cause of difference in a bank‟s earnings because
its prime objective is in providing credit. Assessment of the risk profile of a bank and how it
deals with these risks also plays a significant role in evaluation of quality of the assets. Some of
the main factors may take account of high-quality of understanding of its underwriting
principles, good screening system, bad-debt identification system and collateral management
mechanisms. Non-performing loans, reserve policies for these bad-debt and coverage for these
non-performing loans of a bank is also an important factor in the assessment of assets quality.
Off balance sheet activities of the banks are increasing with a rapid pace so it is of great
importance to measure these activities such as derivatives and swaps Jerome, (2008, p. 6-7).
Evaluation of quality of the assets is primarily based upon assessment of the bank portfolio and
the credit risk associated to it. Capabilities of a bank to identify, quantify, observe and control
credit risk and judged where as provision against these bad and non performing debts are also
taken into account Christopoulos,( 2011, p. 12).
The asset quality is estimated based upon the following key financial ratios,
Table 2.2Asset Quality Ratios Analysis Formula
Ratio Formula
NPLs to total loans

NPLs to total equity

Allowance for loan loss ratio

12
2.2.3 Management efficiency
Efficient management is an additional most important factor following the performance of all
banks. Management efficiency of the bank includes its administrative ability to react in diverse
circumstances. The term management effectiveness involves the ability of management in
generating business and maximizing profits. Focal term administrative proficiency which
essentially indicates the capacity of a bank to increases benefits or minimizes cost under a given
Situation Kauko.K (2007).

Management relates to the competency of the bank‟s managers, using their expertise‟s to make
subjective judgments, create a strategic vision, and other relevant qualities Management is the
key variable which determines a banks‟ success. The evaluation of the management is the
hardest one to be measured and it is the most unpredictable Golin, (2001). There are four ratios
representing the management in the previous studies, operating costs to net operating income
ratio, advance to deposits, net profits to number of staffs and business per staffs.

The Advance to deposit ratio measures the efficiency of management in converting the deposits
available with the bank into high Earning advances. The higher the ratio of indicates the better
the performance of the bank. Olweny (2011), adopted the ratio of operating costs to net operating
income to indicate the operating efficiency for the commercial banks in Kenya, and he found that
the operational costs inefficiency leads to poor profitability. Business per employee means to
measures the competence of all the employees of a bank in generating business for the bank. It is
calculate by dividing the total business by total number of employees. a business, is defined by
the sum of total deposits and total advances and loan in a particular year. And the business per
employee ratio measures the efficiency of employees at the branch level. It also gives important
inputs to assess the real strength of a bank‟s branch network. It is obtained by dividing the Profit
after Tax (PAT) earned by the bank by the total number of employees. The lower the ratio,
results lowering the efficiency of the management.

13
Table2.3Management efficiency ratio analysis formula.
Ratio Formula
Advance To Deposit

Operating Expense to Operating Income

Net profit to No of Employee

Business per employee

2.2.4. Earning Ability

To stay in the market for a long term, banks are totally dependent upon generation of adequate
earnings; rewards to be paid back to its shareholders; to protect and improve its capital. To be
established publically totally depends upon adequate earnings if there are losses it decrease the
capital and liquidity Couto & Brasil, (2002, p. 3).
Earning of a bank is a significant measurement to analyze its financial strength. As we know that
money it is merchandise of the banks, for a longer period of time banks can maintain losses
before they get out of cash. Supervisor must take action each time they realize that the bank‟s
earnings are declining or the bank may goes into bankruptcy. It is difficult for the supervisor to
look into the earnings record of the bank and simply form an opinion about earning position. Past
earning performances have their effects on the bank‟s balance sheet. But, if conclusion of the
supervisor is based upon the results which have taken from the earning records and will used for
timely action, it is suggested that supervisors should be concerned with the indicators that reflect
bank‟s future financial positions and future result Couto & Brasil, (2002, p. 3). To measure bank
earning several variables are used. The first is ROA = Net profit/total Assets. This ratio avoids
the volatility of earnings linked with unusual items, and the profitability of the bank. The higher
of the ratio greater the profitability and has a positive connection with CAMELS. It also
compares the total assets with net profit and shows that assets management is well-organized to
make profit or not Gambaro, et al, (2002, p.254). Second ratio which is used to measure earnings
of bank is ROE = net profit/own capital. This ratio shows the efficiency of the bank, that how
the bank uses its own capital in an efficient manner. It is very easy for the efficient bank to

14
produce money using its own capital Christopoulos, et al, (2011, p. 13).Third ratio is an
important measure of a bank‟s core income i.e. income from lending operations. NIM is the
difference between the interest income generated and the interest income expended by the banks.
In the computation of Net interest margin to total asset, NIM is expressed as a percentage of total
assets. A higher spread indicates the better earnings given the total assets and vice versa. There
are additional ratios try to assess the quality of income in terms of income generated by core
activity-income from lending operation, the interest income to total income indicates the ability
of the bank in generating income from its lending etc.

Table 2.4 earning Ability ratio Analysis

Ratios Formulas
Net interest income
Margin (NIM)
Return on asset (ROA)

Return on equity (ROE)

Operating profit To Total Asset

Net interest income to T Income

Percentage growth of net Profit

2.2.5 Liquidity

Public deposit their money in banks mainly for two reasons. The first one is for safety and the
other is to earn interest income. Thus, repayment of deposits along with timely payment of
interest is of crucial importance for a bank. As a result, banks should always preserve adequate
resources. Liquidity shows the ability of the banks to discharge their liabilities as and when they
mature. Or, it is the ability of the banks to convert non-cash assets into cash as and when needed.
In order to examine the liquidity position of banks, there are four ratios used by different authors.

15
Liquid Assets to demand deposits ratio measures the ability of a bank to meet the demand for
withdrawal of cash from demand deposits in a particular year. It is obtained by dividing liquid
assets by total demand deposits. Liquid assets include cash in hand, balances with banks in
country and outside the country and money at call on short notice Jayanta k.( 2012). Liquid
assets to total deposits ratio indicates the ability of the bank to meet its deposit obligations with
available liquid funds. Total deposits include demand deposits, savings deposits, term deposits
and other deposits. Liquid assets to total assets measure of liquidity indicate the percentage of a
bank‟s total assets in liquid form. Higher the percentage better is the liquidity and vice versa.
Term deposit to total deposit ratio measured that total percentage of term deposit in the total
deposit. If the proportion of term deposit is more in total deposit that is not good for long term
survival of any bank. The smallest ratio of term deposit to total deposit is favorable one Ashish
Gubta, (2015).
Table 2.5 Liquidity Ratio Analysis
Ratios Formulas
Liquid Asset to Demand Deposit

Liquid Asset to Total Deposit

Liquid Asset Total Asset

Term Deposit to Total Deposit

2.3 Empirical Review

The performance of commercial bank analysis has been carried out by many researchers in
different countries. The financial performance evaluation of private banks is done to understand
the effectiveness of bank system. Researchers have considered various articles on bank
performance in Ethiopia and other countries of the world to have more compressive analysis. A
review of those important studies that highlights the CAMEL method presented below.Azizi and
sarkani DYA (2014) research is carried out to assess the performance of Mellat Bank by
adopting the CAMEL model statistical tool were applied to analyze the data. The data
investigation demonstrated that there is a significant and positives association between the

16
indicators of liquidity, management efficiency and earning quality with financial execution.
According to the Chain the research is carried out to examine the relationship between CAMEL
parameters and bank execution to advice supervisor to give a careful consideration to the
CAMEL model to improve competitiveness of banks on the other hand Persona examined the
performance of 65 Indian banks using the CAMEL model and conclude that innovative products,
better service quality and better bargain were beneficial because of prevailing tough competition.
Mishra (2013) Evaluated the performance of different Indian public and private banks over the
decades 2000-2011 using the CAMEL approach and found that private sector banks are at the
top of the list with their performance in terms of soundness being best.

Dash and Das (2009) compared that the performance of public sector banks with private or
foreign banks under the CAMEL frame work. They found that private foreign banks fared better
than public sector banks on most of CAMEL factor in the study period, and that of the two
contributing factor for the better performance of private or foreign were management soundness
and earning and profitability. Besides Mohamed and Hashim(2014) investigated the performance
of Domestic and foreign banks in Malaysia by utilizing a CAMEL frame work during 2008-2012
and regression analyses was used. The study found that asset quality and liquidity have a
significant effect on the performance of Malaysian banks.

Abdulazeez (2014) examined the financial performances of Saudi commercial banks during the
period 2000-2013. A sample of 21 commercial banks including of 10 foreign owned banks and
11 Saudi domestic banks for the captioned 14 years period have been used in the study .Panel
data Linear Multiple Regression model and Ordinary Least Squares have been used in the
present study to estimate the impact of the driver ratios like capital adequacy, asset quality,
operational efficiency, bank size, net loan to total deposits, liquid assets to total assets. On the
financial parameters like Return on Equity (ROE), Return on Asset(ROA), Net Interest Margin
(NIM).The study found that at the pool level, that capital adequacy, operational efficiency, bank
size, net loan to total deposits and liquid assets to total assets have positive and significant
relationship with ROA but asset quality has negative and significant relationship with ROA.
Similarly, capital adequacy, bank size and liquid assets to total assets have positive significant
relationship with ROE, whereas net loan to total deposits has positive but insignificant
relationship with ROE. Asset quality has negative and significant relationship and operational

17
efficiency has negative but insignificant relationship with ROE. All the independent variables
excluding capital adequacy and operational efficiency of banks have positive significant
relationship with NIM. Capital adequacy positive affect net interest margin but it has
insignificant relationship with NIM and operational efficiency significantly affect NIM but
negative relationship with NIM.

Antenehet,al (2013) on their study entitled Health Cheek up of Commercial banks in Ethiopia
assessed the health of 8 private and public banks using ten years of annual report of each
commercial banks (2000-2010) the finding raveled that the independent variables in CAMEL
frame work have highly explained the performance variable i.e. return on Asset and return on
equity. The private bank are in abettor position than public banks interims of asset quality,
management quality and earning ability, while public banks were better in capital adequacy
however liquidity position was high for both private and public commercial banks.

Mulualem (2015) examined financial performance of 14 Ethiopian Commercial Banks using

CAMEL approach from year 2010 to 2014.The study used quantitative research approach, and
analyzed by using multiple linear regression models for two profitability measures: ROE and
ROA. Fixed effect regression model was applied to investigate the impact & relationship of
CAMEL factors with bank profitability measures separately. The empirical end result shows that
capital adequacy, Asset Quality and Management efficiency have negative relation while earning
and liquidity shows positive relationship with both profitability measures with strong statically
significance except for Capital Adequacy which is insignificant for ROA whereas Asset quality
for ROE.

Dakito (2015) carried out a study in the performance of 8 commercial banks during the period
2000-2013 using the CAMEL approach by descriptive and econometric analysis the result
demonstrates that NIB‟S overall performance was good. Furthermore he has measured the
relationship between capital adequacy and financial performance using GLS. The regression
results showed the presence of positive relationship between capital adequacy and bank
performance.

Anteneh (2018) investigated the financial performance of commercial banks by using CAMEL
approach in Ethiopian banking industry. The study was conducted on 11 Commercial banks
during the period 2011 to 2016. Panel data descriptive statistics and economic analysis and fixed

18
effect regression have been used in the study to determine the relative importance of each
independent variable included in the CAMEL frame work to explain dependent variables. The
study found that the ranking process by composite CAMEL; Buna, Zemen and Abay bank were
ranked from 1st to 3rd place. the econometric analysis shows that asset quality, management
efficiency, liquidity ,size of the bank and net interest margin were significant variables to explain
ROA,unlike capital adequacy and earning quality which were not significant variable. In the
same way capital adequacy, asset quality, management efficiency, liquidity and net interest
margin were significant variables to explain ROE. But earning quality size of the bank was not
significant variables to influence ROE.

2.4 Conclusion and research Gap

The financial asset of a country is allocated through banking sector. It acts as a heart through
which the money is injected in to the economy. Therefore, it needs continuous performance
evaluation. The CAMEL model is a useful for performance evaluation and examining the
soundness of banks. From the empirical evidence discussed above the CAMEL variables are
significant to explain the dependent variables ROA and ROE positively. In addition to CAMEL
size of the bank and net interest margin influence the dependent variables in the study of
Anteneh (2018). This is therefore bank size and net interest margin were applied besides
CAMEL variables to know their effect on performance of banks.

Previous researches used sample banks for their data and were limited to the period before 2016.
This research used data of all private banks and the period would cover data of the years from
2015 up to 2019, In addition to this study have been used the annual reports of the banks after
the adjustment of IFRS since2017.

19
 CHAPTER THREE

3. Research Design and Methodology

This section gives the information about methodology that was used to carry out the research.
The main discussion is on the population, sampling frame and size, sampling method, research
design, and research instrument and on the use of technique that was employed to measure and
infer the variables of the study in the subsequent chapter of the research.

3.1 Research Design

The main purpose of the study is that to evaluate the financial performance private commercial
banks and find out the impact of CAMEL component on financial performance of 16 private
commercial banks in Ethiopia for the period 2015-2019. As stated by (Croswell, 2009 p.3) a
research designs are planes and procedures for research that span the decisions from broad
assumption to detailed method of data collection and analysis. There for this study adopted an
explanatory approach by using balanced panel data research design to achieve the stated
objective. On the other hand to conducting business and social research there are three
approaches to be used. These are quantitative, qualitative and mixed methods (Croswell,
2009).As a result the researcher was used quantitative research approach to evaluate financial
performance of private commercial banks.

3.2 Target population

The target population is all private commercial banks registered by NBE and under operation in
the Ethiopia currently. At this time, there are 16 private commercial banks in the country.

3.3 Sample size and sampling method

As stated above the target population would be all private commercial banks operating in the
country currently. Among this the study was conducted in all private commercial banks. The
main aim of sampling is to select a representative group of element that truly reflects the
characteristics of the population but in this research comprehensives sampling technique was
applied, to sure the results of the research had perfect representative of the industry. The
necessary data is obtained from the official website of the all private commercial banks, during
the period 2015-2019

20
3.4 Data collection method

The proposed topic relates to Banking Sector of Ethiopia. This study used secondary data to
assess the performance of the banks. The vital information was gathered from the financial
statements of 16 Ethiopian private commercial banks over the period of 2015-2019. These are
used to calculate the key financial ratios of the Private commercial banks for the above
mentioned period, as well as to assess the performance of these banks. Moreover, data were also
assembled from annual reports, the World Wide Web (Internet) of the selected banks, and
relevant previous studies.

3.5 The variables

Referring to the prior discussion, this thesis employed two categories of variables in order to
examine the performance of the selected commercial banks. These categories are classified as
dependent variables and independent variables. In the case of this study, Nine (9) variables have
been chosen: Two dependent and seven independent variables

3.5.1 Dependent variable of the study

The dependent variable in this study is profitability as a measure of bank performance majority
of prior profitability studies commonly used two main proxies to measure profitability which are
ROA (Return on Asset) and ROE (Return on Equity) e.g. Athanasoglou et al., (2008); Garcia
&Guerreiro, (2016); Naeem et al., (2017); Pathneja, (2016); Singh & Sharma, 2016; Tabash,
2018; Tiberiu, 2015; Zampara et al., 2017).

Return on asset measures efficiency of the company in using its assets to generate net income.
Higher values of the return on assets shows that the company is more effectively managing its
assets to produce greater amount of net income. It was computed as the ratio of net income after
tax to total assets of the bank. Return on Equity measures the profit earned per birr of capital
invested.ROE is a financial ratio that refers to how much profit a company earned compared to
the total amount of shareholder equity invested or found on the balance sheet or it is what the
shareholders look in return for their investment Vincent Okoth (2013).It was computed as the
ratio of net income after tax to total equity capital of the bank.

21
3.5.2 Independent variable of the study
The study have seven independent variables that are: capital adequacy, asset quality,
management efficiency, earning quality, liquidity, bank size and net interest margin.

 Capital Adequacy Ratio

It is vital for a bank to maintain investor‟s confidence and preventing the bank from
bankruptcy. It shows the overall financial condition of banks. This variable can be measured
by
CAR=

 Asset quality
The asset quality is an important indicator to measure the strength of the bank. The reason
behind computing the asset quality is to determine the factor of nonperforming asset (NPA)
as percentage of the bank total asset. Kumar S Sharma R (2014).popular indicator of asset
quality is loan default to total advance.

AQ=

 Management efficiency
Effective management is being noticeable amongst the most essential component behind the
banks performance indicators. The bank management efficiency guarantees the growth and
survival of bank. Karri HK, Mishra BM (2015).from the four ratios discussed in the review,
expenditure to income ratios should best explain the parameter of CAMEL.

MGTQ =

 Earning quality
The earning quality is a very important measure that defines the capability of a bank to earn
reliably. It determines the profitability of banks and explains its sustainability and progress in
earning the future. (PastoryD, MarobeheM, Kaaya I., (2013) .A popular indicator of earning
quality is percentage growth of net profit

EQ =

22
 Liquidity
Liquidity of banks acts as a blood of human body that enables a bank to maintain its
operational activities and to survive on the competitive market. Odunga et al. (2013) On the
other hand it is of utmost importance for a bank to maintain correct level of liquidity the
popular measurement of liquidity is liquid asset to total asset.

LQ =

 Net interest Margin

It is an important measure of a bank‟s core income.NIM being the difference between the
interest income and the interest expended as a percentage of interest income.

NIM =

 Bank size
Bank size is commonly considered as a relevant determinant of bank performance.
Smirlock (1985) finds a positive and significant relationship between size and bank
profitability. To confine the relationship between size and bank profitability, we use the log
of total assets of the banks as a proxy for bank size.

3.6 Model Specification

The researcher used multiple regression model of ordinary least square (OLS) method to
determine the relative importance and impact of each independent variable on bank performance
and affixed effects model has been used after testing Hausman Test for the validity of the
assumption of the model. The multiple regression models for performance indicators ROA and
ROE are shown in the equation below.

Model 1 is used to test the relationship between independent variable and ROA

ROAit B0+B1CARit+B2AQit+B3MGTQit+B4ERNit+B5LIQit+ B6NIMit+B7SIZEit+Eit

Model 2 is used to test the Relationship between independent Variable and ROE

23
 ROEit B0+B1CARit+B2AQit+B3MGTQit+B4ERNit+B5LIQit+ B6NIMit+B7BSIZEit+Eit

Where

Subscript i refer to firm i, and subscript t refers to year t

ROAit= Performance of Bank i at time t

ROEit= Performance of Bank i at time t

B0 = Intercept constant

CAR=the ratio of total capital to total asset of bank i at a time t

AQ=the ratio of Asset Quality

MGT= the ratio of Management quality of bank I at a time t

ERN=the ratio of none interest expenditure to total income

LIQ=the ratio of liquid Asset to total Deposit of bank i at a time t

NIM it = net interest margin of bank i at time t

SIZE it= size of bank i at time t

B1,,,,,,,,,,,,,,,,,, B7 ……are coefficients of the explanatory Variables

3.7 Method of Data Analysis

For the purpose of this study, the researcher used both Descriptive statistics for CAMEL ratio
and econometrics analysis for panel data. The descriptive statistics include measures dispersion
and the measure of central tendency that are used to describe the data set. According to the
Trochim descriptive measures and summarize particular data set that can either represent a
sample or a population used for a research Trochin W,(2008).Besides correlation and linear
regression analysis were use to measure the strength of the relationship between the two
variables the dependent and independent. Multiple linear regression model and t static were
applied to determine the relative importance of each independent variable in influencing the
performance of the bank.

24
 CHAPTER FOUR
Analysis and Discussion
4 Descriptive Analysis
In this section of the study, the summarized financial data has been analyzed, discussed and
interpreted accordingly. Using of the already stated CAMEL rating ratio of capital adequacy,
asset quality, management efficiency, earning quality and liquidity with the help of
corresponding table.

4.1 Capital Adequacy

Capital Adequacy measures the overall financial situation of the banks and also the ability of
management to meet the need for supplementary capital. It also assured that whether the bank
has enough capital to suck up unanticipated losses. In order to measure capital adequacy of banks
three important ratios have been used, namely capital adequacy, debt to equity ratio and advance
to asset ratio

4.1.1 Capital adequacy ratio

According to the result presented by Table 4.1 Addis international Bank is at the top position
with the average capital adequacy ratio of 23 percent followed by Debub Global and Enat Bank
with capital Adequacy ratio of 20.13 percent and 18.62 percent respectively. The lowest average
percentage was registered by Cooperative Bank of Oromia which is 9.19 percent. The average
score also shows a declining trend from year to year and the average CAR ratio for five years is
14.7 percent.

4.1.2 Debt Equity Ratio

Debt Equity ratio of Table 4.2 indicates the degree of leverage of a bank. Meaning how much
proportion of the bank business is financed through debt and how much through equity.
Accordingly Addis international Bank Achieved top position on an average of 3.39% followed
by DGB and ENAT Bank with the average leverage ratio of 4.02% and 4.39% respectively
meaning that the debt of ADDIS, DGB and ENAT bank were 3.3,4 and 4.39 times to that of
their equity whereas CBO scored the least position with average leverage ratio of 10.2%

25
4.1.3 Loan and Advance to Asset Ratio

This ratio is an indication of bank‟s aggressiveness in lending which ultimately results in better
profitability. As Demonstrated in Table.3 AIB,BUNA and UNITD Bank were takes the position
from first to third place with an average score of 54.66,53.55 and 52.89 respectively this mince
the above mentioned banks 54.66%,53.55% and 52.89%of their total asset available for loan and
advances. The lowest average percentage was registered by Debub Global Bank which is
40.65%.The average score was also shows an increasing trend from 2015 to 2019 and the
average Advance to Asset ratio for five years is 49.72%.

4.1.4 Composite Capital Adequacy

As illustrated from Table 4.4 composite capital adequacy of commercial banks under this study
Addis ,Enat and Buna banks took the position from first to Third place with an average
composite score of 4.3,4.7 and 5.3 respectively.OIB placed the last position with the Score of
14.7

4.2 Asset Quality

The Asset quality is an important parameter to gauge the degree of financial performance. The
prime slogan of behind measuring the asset quality to ascertain the components of
nonperforming asset as a percentage of total asset. In order to measure the asset quality of banks
three important ratio have been used namely non performing loan to total Asset, non performing
loan to total loan and non performing loan to share holders equity. On-Performing loans are
usually provision for loan loss is used.

4.2.1 Non Performing loan to Total Asset

The result of none performing loan to total asset calculated and presented in Table 4.5 regarding
Asset quality ratio the lower the ratio is the higher the performance as a result ENAT bank had a
better quality followed by Addis international and United bank with the ratio of 0.35,0.5 and
0.51 respectively. The highest ratio or the lowest performance registered by CBO which is
1.97% of its asset, and the second position from the bottom was taken by ZB with the score of
1.95% of its asset kept as a provision.

26
4.2.2 None performing loan to Total Loan and Advance

The bank is regulated to back up the bad debt by providing adequate provision for loan loss. the
ratio of provision for loan loss to total loan is the most standard parameters to measure the Asset
quality of the banks. The lower ratio denotes better quality of the loan portfolio of the bank
relatively better than the other banks. As the Table 4.6 exhibited that ENAT Bank 0.67, UB 0.98
and Addis Int. 1.09 registered the first three positions. The highest ratio or the weak asset quality
was scored by ZB 4.38.

4.2.3 None performing loan to Equity

The ratio tells us how much proportion of the share holder‟s capital is under the non performing
Asset. The lower the ratio to be the better performance of the bank as it demonstrated in the
Table 4.7, ENAT bank took the leading position with the ratio 1.88 and ADDIS and DGB had
the next two position with the ratio of 2.18 and 3.59 respectively. The last and lowest percentage
was recorded by CBO 22.06%.Meaning that None performing loan of CBO was reached to 22%
of their capital within the study period.

4.2.4 Composite Asset Quality

As figured out from the Composite Asset quality Table 4.8, ENAT, ADDIS and UB were ranked
from first to third place accordingly with the value of 1, 2.3 and 3.3 respectively. On the other
hand CBO was placed in last position with value of 15.7 next to ZB which had a score of 15.3.

4.3 Management efficiency

The management of the bank takes crucial decisions depending on the risk perception of the
banks. The performance of the management capacity is usually qualitative and can be understood
through the subjective evaluation of management system, organization culture and control
mechanism and so on. In addition, the ability of the management of a bank can also be gauged
with the help of certain ratios.

4.3.1 None Interest Expense to Operating Income

The lower this ratio indicates the management capability to control or minimize cost per unit of
revenue generated is relatively better than other banks. Accordingly as illustrated from the

27
table.4.9 ZB,AIB and ANBASA bank spends 44,50 and 51 cents in order to generate 1 birr of
operating income respectively.CBO was the most expensive bank to generate 1 birr of operating
income its required to expend 71 cents in the captioned period. This is due to 2016 Fiscal year
expenses incurred 91 cents to get one birr of income. The overall average cost of banks to
generate one birr was 56 cents on the given period.

4.3.2 Loan and Advance to Total Deposit

This ratio indicates that the efficiency of the management towards on converting the collected
customers deposit to earning loan and advance. Referring to table 4.12 it was found that BUNA,
CBO and ENAT banks converts 70.2%, 68.3% and 68.1% of their deposits to loans. While the
least average advance to Deposit ratio was 54.8% which was recorded by OIB the last performer
of the industry. Average performance of the industry under this study shows an increasing trend
though out the study period. On the other hand, the average performance percentage of the
banking industry reached 64.4% meaning the industry converts 64.4 % of its deposits to loan and
Advance on the study year.

4.3.3 Net profit per Employee

This efficiency and productivity of banks measured interims of profit per employee ratio. As it is
presented table.4.10 profit per employee of ZB ranked in the first place with profit value of
399,179 birr. Per employee. ENAT and BUNA were placed in the second and third place with
profit per employee score of birr.30, 538 and birr.213, 751 respectively. The lowest Score was
registered by DB with ratio of birr.94,761 per employee, on the other hand the average
performance of profit per employee of the banking industry reached birr 171,696 in the study
period.

4.3.4 Business per employee

The main business functions of commercial banks are granting loan and advance and collecting
deposit. This ratio is an important indicator of productivity of banks since employees are
generally considered as input and business as output of a bank. The analysis of the table.4.11
reveals that ZB, ENAT and BUNA banks were ranked from first to third place and DGB was
placed in the last position of private commercial bank.

28
4.3.5 Composite Management Efficiency

It was known that from Table 4.13 of composite management efficiency ratio ENAT, ZB and
BUNA banks achieved the first three best places accordingly. Consequently BOA scored the
lower rank in the management efficiency ratio analysis.

4.4 Earning Ability

The quality of earning is very important Parameters of the banks that determine the ability of a
bank to earn consistently; it also explains the sustainability and the growth of the bank in the
near future.

4.4.1 Net Interest Margin (NIM) to Total Assets

NIM to total Asset is key measure of a bank‟s core income (income from lending operations). A
higher ratio demonstrates higher earning capacity and vice versa. From the Table 4.14 it is
known that BUNA, ANBASA and CBO took the position from 1st to 3rd place with highest
earning capacity of 4.8%, 4.7% and 4.7% respectively. And also it was found that ZB registered
the least earning capacity which is 2.4%

4.4.2 Net Profit to Total Assets (ROA)

ROA is a measure of how efficiently a bank uses its assets. That is, the amount of profit a bank is
generating per one birr in assets that it employs. The higher the ROA the more efficient the bank
is in utilizing its assets. As exhibited on Table 4.15 the first 3 highest earning capacities were
recorded by ADDIS, ANBASA and ZB with an average ratio of 3.1%, 2.9% and 2.8% recorded
respectively. the least average ROA was recorded by CBO this is because of 2016 decline profit
performance as indicated in profit growth its profit decline by (87%) with respect to 2015.On
average all private banks under this study generated 2.5% net profit from a birr investment on
their total asset.

4.4.3 Percentage growth in Net Profit

It is the most common method of financial ratios which is used to measure the performance of
banks. Percentage growth of net profits enables to evaluate the constancy and how well the bank
will perform in terms of profit.CBO has shown remarkable percentage growth in net profit as it

29
explicitly depicted in Table 4.16 due to the highest profit growth in 2017 from a profit of 39
million 2016 To 340 million in 2017. The Second average percentage growth was recorded DGB
due to the performance achieved in 2015 and 2018 with a net profit of 51 million and 106 million
respectively. The last place was taken by DB by scoring average percentage growth of 7.5

4.4.4 Operating profit to total asset ratio

The immediate observation we can take from the Table 4.17 CBO had the lowest operating profit
to total asset consequently ADDIS, ZB and ANBASA banks earned the highest ratio
3.96%,3.7% and 3.7% respectively. The overall average Operating profit as percentage to total
assets ratio of the study all private banks is 3.4%.this menace banks were earned 3.4% from its
operation after meeting its operating expenses for every birr investment in total asset on the
given period.

4.4.5 Interest Income to Total Income

Based on Table 4.18 the first three highest ratios were handled by BOA, NIB and UB with an
average proportion of 90.7%, 79.9% and 77.5% respectively this figure indicates the proportion
of income generated from lending activities and interest earned on deposit made from other
banks to total income generated by banks. The least proportion was recorded by DGB, which
was 45.3% meaning that 45 % of the total income of DGB was generated from its interest
income of lending activity.

4.4.6 Composite Earning Quality

As can be seen in the Table 4.19, Composite earning Quality reveals the profitability and
productivity of banks therefore ANBASA, BUNA and AIB were ranked from the first to the
third place by scoring an average earning quality of 4.6, 5.8 and 6.2 accordingly. ZB had the last
position by registering an average earning quality of 11.8

4.5 Liquidity
This ratio indicates the ability of the bank to meet its financial obligations in a timely and
effective manner. The high liquidity ratios mean a bank has a larger margin of safety and ability
to cover its short-term obligations. This is measured by using

30
4.5.1 Liquid Assets to Demand Deposits

As Table 4.20 exhibited the, liquid asset to demand deposit ratio ENNAT bank was at first place
with highest average percentage of 161.7% which was followed by OIB with an average
percentage of 158.3% while Wogagen Bank was at last place with least average of 63.9%.In this
ratio banks judge themselves whether they have sufficient amount of liquidity to meet the
withdrawal demand of their demand account depositors.

4.5.2 Liquid Assets to Total Deposits

This ratio indicates the liquidity to be had to the depositors of a bank. From the Table, 4.21 it
was known that the liquid asset of DB, DGB and ZB covers 76.4%, 43.3% and 41.4% of onetime
withdrawal demand of all of their depositors respectively. As compared to NIB which only
covers 18.9% of its total deposits.

4.5.3 Liquid Assets to Total Assets

It is used to measure the proportion of liquid assets to total assets indicates the overall liquidity
position of the bank. As observed from Table 4.22 ZB ranked first followed by DGB and ADDIS
Bank. While NIB bank ranked to the least place with percentage score of 32.7%, 29.4, 27.1 and
14.8% respectively. The average of all banks shows a decreasing trend from year to year and the
on average all banks liquid assets were took the proportion of 20.7% from their total asset for the
captioned periods under this study.

4.5.4 Term Deposit to Total Deposit

Concerning term deposit to total deposit ratio the smaller the ratio is the best performance of the
bank because of the reason that the term deposit is cost for the bank. Table 4.23 was found that
CBO, WEGAGEN and DB were in a better position by having lowest proportion of 4.2%, 8.9%
and 8.9% respectively and ENAT bank was placed at the last position do to the fact that 39% of
its total deposit was came from fixed time deposit.

4.5.5 Composite liquidity

Table 4.24 tells us the overall liquidity position of banks under this study as a result DGB,ZB
and BIB are the first most liquid private banks with composite rate 4.5, 4.8 and 6
respectively.NIB got the last position by scoring composite liquidity rate 15.3

31
4.5.6 Composite CAMEL
In order to assess the overall ranking of private commercial banks in Ethiopia the composite rate
has calculated from the individual ranking of banks for a period of 2015 to 2019. As per a
CAMEL model analysis. And the result Shown in Table 4.25, ADDIS, ENAT and BUNA banks
took from the first place to the third place. And OIB stood at the least place.

4.6 Econometrics analysis

In this section objective is to examine the outcome and understanding whether there is a
relationship between independent and dependent variable, whether the independent variables
impacting on a dependent variable or not. To measure the relationship, Correlation and
Regression investigation were utilized. These would include descriptive statistics, Tests of
multicolinearity, tests of auto correlation, tests of normality, tests of hetroscadeastcity and fixed
effect regression output of both return on asset and return on equity

4.6.1 Descriptive statistics

The results in Table 4.26, shows the descriptive statistics applied to the data of the banking
industry of private commercial banks of Ethiopia for the period 2015 to 2019. A total of 80
observations have been gathered from 16 commercial banks for the data analysis. The table
provides that the return on asset and return on equity have a mean value 2.48% and 17.3%,
maximum value of 3.97% and 28.08% which was registered by DGB on year 2016 and OIB on
2018, both minimum value 0.37% and 3.83%, were recorded by CBO on 2016 budget year. And
also have standard deviation values of 0.58% and 4.19% for 80 observations respectively.

Table 4.26 descriptive statistics

ROA ROE CAR AQ MGTQ ERNQ LIQ NIM SIZE
MEAN 2.48 17.33 14.76 1.74 0.56 45.53 26.35 59.40 10.08
MEADIAN 2.42 16.6 14.04 1.51 0.55 29.8 24.7 60.9 10.1
MAXIMUM 3.97 28.08 25.9 5.85 0.95 764.5 49.1 80.4 10.8
MINIMUM 0.37 3.83 7.87 0.27 0.39 -87.4 13.16 32.7 9.05
STANDARDDEVATION 0.58 4.19 3.67 1.09 0.08 93.9 7.99 8.96 0.39
OBSERVATION 80 80 80 80 80 80 80 80 80
Source : Eview out put

32
The mean of independent variables Capital adequacy, asset quality, management efficiency,
earning quality, net interest margin and bank size ratio have a positive value with amount 14.7%,
1.7%, 0.56%, 45.5%,26.3%, 59.4% and 10% respectively. The best capital adequacy ratio of
ADDIS bank on 2015 leads capital adequacy to have maximum values of 25.9% and the lowest
capital adequacy of CBO on 2019 obliged capital adequacy to have minimum values of 7.87%
and standard deviation values of 3.6%. Poor asset management of Zeeman bank on 2015 forces
asset quality to bear maximum values of 5.8% and best performance of ENAT bank on 2016 on
this regard leads it to have a minimum value of 0.21% and standard deviation values 1.08%of asset
quality
Best cost sensitiveness of ZEMEN bank on 2019 contribute management efficacy to have
minimum values of 0.4 cents to got one birr of operating income and do you to the fact that a
poor net profit performance of CBO on 2016 obliged to have a maximum values of 0.95%. and
the standard deviation of 0.08.The earning quality which is a net profit percentage had
maximum value of 764.56% and had a minimum value of (87.48)% this do you to the poor
earnings performance of CBO in 2016,and by its highest profit performance recorded in Changes
its profit from 39 million to 338 million. The standard was found 93.5%.
The liquidity ratios that mince the liquid asset to total deposit ratio had a maximum value 56.78%

and the minimum value of 13.17%, this is due to with highest liquidity position of DGB in2015
and lower due to lower position of united bank in 2019. The standard deviation was found to be
8.61%.The net interest income to total interest income ratio or net interest income margin had the
maximum value 80.41% and the minimum value 32.79% due to the contribution of CBO, 2015
best performance and Enat bank, 2017 lower performance. The standard deviation of net interest
margin was found to be 8.9%

4.7 Test of multi co linearity

The correlation coefficient represents a linear relationship between two variables. The most
widely used type of correlation coefficient is Pearson‟s correlation, also called linear or product
moment correlation. In order to examine the possible degree of multi co linearity among the
explanatory variables, and to test the independence of explanatory variables or to detect any
multi co linearity problem in regression model the study used a correlation matrix of independent
variables .The results in Table 4.27 reports that all the correlation coefficient values are less than

33
0.8.The highest correlation coefficient exists between SIZE And CAR which was 0.733. As
noted by Gujarati, (2003), Hair et al. (2006) and Pallant (2005) cited on Mohammed G.(2014)
and according to Copper & Schindler (2009) and Masher (2007) as cited on Mulualem (2015)
the correlation coefficient among the explanatory variables is above 0.8 or 0.9, it causes a
multicollinearity problem but the correlation coefficient below 0.9 not cause multi co linearity
problem. There for the results of correlation matrix does not imply the sign of multi co linearity

Table 4.27 Correlation matrix of Independent Variables

CAR AQ MGTQ ERN LIQ NIM SIZE
CAR 1 -0.349 -0.139 -0.430 0.663 -0.260 -0.733
AQ -0.349 1 0.710 -0.156 -0.288 0.141 0.058
MGTQ -0.139 0.710 1 -0.046 -0.185 0.279 -0.20
ERN -0.043 -0.156 -0.046 1 0.238 0.145 -0.097
LIQ 0.663 -0.288 -0.185 0.238 1 0.134 -0.717
NIM -0.260 0.141 0.279 0.145 0.134 1 0.129
SIZE -0.733 0.058 -0.020 -0.097 -0.717 0.129 1
Source: e -view output

4.8 Test of auto correlation

Auto correlation is an assumption that the error terms are linearly independent of one another. If
the error terms are correlated with one another it would be auto correlated. The best test for the
existence of Serial correlation is the Durbin-Watson statistics provides approve for significant
residual auto correlation. According to Anteneh (2018), if the Durbin-Watson value is close to 2,
it implies no serial correlation in the model, if it is close to zero; positive correlation in the model
and if is close to 4;a negative correlation is exist in the model. From our respective regression
analysis we found that a Durbin-Watson value of 2.417 and 2.216 for ROA and ROE, this is the
indication of the absence of serial correlation in the model. In addition to Durbin-Watson
statistics test a serial correlation is tested by Breusch-Godfrey Serial Correlation LM Test,
According to Brook, 2008 there is no Serial Correlation problem if its Prob. Chi-Square (2) value
is greater than 5%.Table 4.28 revealed that Prob. Chi-Square (2) of ROA and ROE is 62.4% and
12.9% respectively, There for there is no auto correlation problem in the model.

34
Table 4.28 Test of auto correlation
Breusch-Godfrey Serial Correlation LM Test: ROE
F-statistic 1.828538 Prob. F(2,68) 0.1685
Obs*R-squared 4.082864 Prob. Chi-Square(2) 0.1298

Breusch-Godfrey Serial Correlation LM Test:ROA

F-statistic 0.405115 Prob. F(2,68) 0.6685
Obs*R-squared 0.941989 Prob. Chi-Square(2) 0.6244

Source: e -view output

4.9 Test of Normality

The One and the fundamental assumption of classical linear regression model is normality. Test
for normality is require to determine whether the residual are normality distribute or note
According to Chris Brooks (2008 p 162-163) as cited on Anteneh (2018) one of the most
commonly applied tests for normality is the BeraJarque (BJ) test. If the residuals are normally
distributed, the histogram should have bell-shaped and the Bera-Jarque statistic would be
insignificant. This indicates that the probability value given at the underside of the normality test
screen should be bigger than 0.05

As we can see from the Table 4.29 and Table 4.30 normality Test result the probability value of
Jarque-Bera shows a value of 0.94 for return on asset and 0.87 for return on asset and kurtosis of
3.17 and 2.71 respectively which is approximately equal to three. There for we can conclude that
the residual are normally distributed

35
Table 4.29 tests of normality ROA
12
Series: Residuals
Sample 1 80
10
Observations 80

8 Mean 7.46e-17
Median -0.003231
6 Maximum 0.565916
Minimum -0.647963
Std. Dev. 0.226649
4
Skewness 0.038174
Kurtosis 3.170693
2
Jarque-Bera 0.116551
0 Probability 0.943390
-0.6 -0.4 -0.2 0.0 0.2 0.4 0.6

Table 4.30 tests of normality ROE

8
Series: Residuals
7 Sample 1 80
Observations 80
6

5
Mean -5.47e-16
Median -0.043428
4 Maximum 3.740482
Minimum -4.324889
3 Std. Dev. 1.708819
Skewness -0.026774
2 Kurtosis 2.719919
1
Jarque-Bera 0.271042
0 Probability 0.873261
-4 -3 -2 -1 0 1 2 3

4.10 Tests of Heteroscedasticity

The forth assumption of CLRM is about the variance of the error term is constant this is known
as the assumption of homoscedasticity. According to Brooks, (2008,p 132) cited on
Tamirat,(2015) If residuals have constant variance, we call residuals are homoscedastic . To
examine we have applied the Breusch-Pagan-Godfrey test. As we learned out from the Table
4.31 the p value of both ROA and ROE were in excess of 0.05, as a result we conclude that there
is no evidence for the presence of hetroscedacity on both ROA & ROE

36
Table 4.31 Heteroscedasticity tests
Heteroskedasticity Test: Breusch-Pagan-Godfrey ROA

F-statistic 2.005118 Prob. F(9,70) 0.0514

Obs*R-squared 16.39693 Prob. Chi-Square(9) 0.0590
Scaled explained SS 13.62533 Prob. Chi-Square(9) 0.1363

Heteroskedasticity Test: Breusch-Pagan-Godfrey ROE

F-statistic 1.136989 Prob. F(9,70) 0.3491

Obs*R-squared 10.20320 Prob. Chi-Square(9) 0.3343
Scaled explained SS 6.717853 Prob. Chi-Square(9) 0.6665

Source: e-view output

4.11 Fixed effect Regression Analysis of ROA

Table 4.32 Regression Analysis of ROA
Dependent Variable: ROA
Method: Panel Least Squares
Date: 06/14/20 Time: 23:28
Sample: 2015 2019
Periods included: 5
Cross-sections included: 16
Total panel (balanced) observations: 80

Variable Coefficient Std. Error t-Statistic Prob.

C -2.841134 2.116689 -1.342254 0.1849

CAR -0.011941 0.025072 -0.476261 0.6357
AQ -0.202530 0.044489 -4.552394 0.0000
MGTQ -2.925616 0.714013 -4.097428 0.0001
ERNQ 0.000127 0.000324 0.393993 0.6951
LIQ 0.021603 0.007205 2.998530 0.0040
NIM 0.034508 0.008576 4.024019 0.0002
SIZE 0.485930 0.169200 2.871928 0.0058
DUMYYER3 -0.160914 0.062699 -2.566451 0.0130

Effects Specification

Cross-section fixed (dummy variables)

R-squared 0.904459 Mean dependent var 2.484215

Adjusted R-squared 0.865219 S.D. dependent var 0.587473
S.E. of regression 0.215677 Akaike info criterion 0.013252
Sum squared rid 2.604919 Schwarz criterion 0.727860
Log likelihood 23.46992 Hannan-Quinn criter. 0.299759
F-statistic 23.04931 Durbin-Watson stat 2.428670
Prob(F-statistic) 0.000000
Source: e-view output

37
The regression model summery in Table 4.32 provides the measure that shows the extent to
which the independent variables can predict the dependent variable ROA and how well the
overall model used fits our study. As it is observed from the table R squared and the adjusted R-
squared value were 0.90 and 0.86 respectively which indicates 90% of the variance in the
dependent variable ROA is caused by the independent variables CAR,AQ
MGTQ,ERNQ,LIQ,NIM and SIZE .The F value 23.04, which is a high value having a significant
value 0.0000,which is less than 0.05. This indicates that the regression model is significant at
95% of confidence level. On the basses of regression analysis of ROA presented in the above
table independent variables AQ, MGTQ, LIQ, NIM and SIZE are significant at 1% significant
level but CAR and ERNQ are not significant to explain ROA because of their p value 0.63 and
0.69 Respectively which is greater than 0 .05 .Further more it has been observed that the
coefficient of the independent variables tells us the correlation with ROA. Hence AQ and MGTQ
have a negative relationship with ROA with a coefficient -0.20 and -2.92 meaning that with the
one percent decreases in AQ and MGTQ of banks there is a 0.20 percent and 2.92 Percent
increment in ROA. On the other hand LIQ, NIM and Bank SISE have appositive relationship
with ROA with the ratio 0.021, 0.034 and 0.048 respectively; this means if a one percent
increases in LIQ, NIM and SIZE of the bank the ROA would increases 0.021%, 0.034% and
0.048% accordingly. Finally as stated earlier Capital Adequacy and earning doesn‟t have strong
relationship with ROA but CAR has a negative insignificant impact.

38
4.12 Fixed effect Regression Analysis of ROE
Table 4.33 Regression Analysis of ROE
Dependent Variable: ROE
Method: Panel Least Squares
Date: 06/15/20 Time: 05:12
Sample: 2015 2019
Periods included: 5
Cross-sections included: 16
Total panel (balanced) observations: 80

Variable Coefficient Std. Error t-Statistic Prob.

C 6.384509 15.61560 0.408855 0.6842

CAR -1.328285 0.184963 -7.181373 0.0000
AQ -0.632116 0.328209 -1.925953 0.0592
MGTQ -33.72620 5.267534 -6.402654 0.0000
ERNQ 0.004189 0.002387 1.754678 0.0848
LIQ 0.145650 0.053151 2.740313 0.0082
NIM 0.250064 0.063265 3.952651 0.0002
SIZE 3.157310 1.248249 2.529391 0.0143
DUMYYER3 -0.821467 0.462554 -1.775938 0.0812

Effects Specification

Cross-section fixed (dummy variables)

R-squared 0.898097 Mean dependent var 17.33130

Adjusted R-squared 0.856244 S.D. dependent var 4.196536
S.E. of regression 1.591126 Akaike info criterion 4.010086
Sum squared resid 141.7742 Schwarz criterion 4.724694
Log likelihood -136.4034 Hannan-Quinn criter. 4.296593
F-statistic 21.45830 Durbin-Watson stat 2.225802
Prob(F-statistic) 0.000000

Source: e-view output

As Table 4.33 revealed that the R squared and the adjusted R squared of the model is 0.89 and
0.85 percent respectively which means 89% of variation in the Dependent variable ROE was
explained by independent variables CAR, AQ MGTQ, ERNQ, LIQ, NIM and SIZE of the bank.
This indicates that all the explanatory variables are collectively good to in predicting ROE.As we
have seen from the table the capital adequacy ,asset ,management efficiency, Net interest margin
and bank size significantly affect return on equity at 1% level significance but Asset quality and
earning quality were Statistically insignificant to predict return on equity. On the other hand the
probability of F statistics tells as the overall significance of all independent variables due to the
probability value of F-statistics was 0.000. Therefore we can conclude that all the explanatory
variables together in the model significantly affect the ROE.

39
The independent variable CAR, AQ and MGTQ has an inverse relation with the dependent
variables ROE with the coefficient -1.32, -0.632 and -33.7 accordingly meaning that, if the ratio
capital to Total Asset (CAR) decreased by one percent then ROE would increases by 1.32
percent vice verse. Furthermore earning quality, Liquidity, Net Interest Margin and Bank size
have appositive relationship with ROE with the coefficient 0.00041, 0.145, 0.25 and 3.15
accordingly this indicates that if liquidity (the ratio of Liquid Asset to Total Deposit) increases
by one Percent then Return on Equity increases 0.145% the same is true for the remaining
variables.

4.13 Discussion Hypothesis

This section contains discussion on the basis of the finding of the study, which will lead to
acceptance or rejection of the hypothesis.

H1: Capital Adequacy has significant impact on performance of private Commercial banks
As mentioned earlier in the chapter three Capital to total asset ratio has been used to measure
capital adequacy for the purpose of testing the hypothesis return on asset and return on equity
were used to measure bank performance to test the significance of capital adequacy with it. It is
observed that p value 0.63 is above the significance level p value .05 but the p value 0.000 for
ROA which is below significance level. There for the H1 is rejected for ROA and accepted for
ROE

H2: Asset quality has significant impact on performance of private Commercial banks
The second hypothesis of the study at hand states that NPL to total asset ratio has a significant
impact on banks performance. For the purpose of testing the hypothesis a regression model is
used with intent to study impact of asset quality on bank‟s performance. It is observed that the
asset quality had p value 0.000 which is below the significant level 1%. It is concluding that
asset quality significantly affect the ROA as a result the null hypothesis is accepted
H3: Management Efficiency has significant impact on performance of private Commercial banks
The third hypothesis of the study at hand states operational expense to operating income ratio
significantly affects performance of private banks. It was observed that from the regression result
the stated ratio has p value 0.000 for both ROA and ROE. Therefore it is concluding that
management efficiency ratio significantly affect the performance private banks as a result the
null hypothesis cannot be rejected.

40
H4: Earning Ability has significant impact on performance of private Commercial banks.
The fourth hypothesis of the study is percentage growth of net profit has been used as a
measurement of earning quality of banks. It can be observed that from the regression table the
above ratio has a p value 0.69 for ROA and a p value 0.059 for ROE which is above the level of
significant p value 0.05. Therefore the hypothesis was rejected meaning that the percentage net
growth does not affect significantly the performance of private banks.

H5; Liquidity of has Significant impact on performance of private Commercial banks

As mentioned earlier in the chapter three the liquidity of the banks can be measured by liquid
asset to total asset ratio. It was observed that from the regression table of ROA and ROE the
mentioned ratio has the p value 0.004 and 0.008 respectively which is less than p value.005 this
indicates that liquidity of the bank has a significant impact on performance of the private banks.
Therefore the above hypothesis is accepted.
H6; Bank sizes has significant impact on performance of private Commercial banks
The six hypothesis of the study at hand states bank size has a significant effect on performance
of private commercial banks as mentioned earlier in chapter two log of total asset has been used
to measure the size of the banks .It was observed that from the regression table bank size
significant at significant level of 0.0058 with ROA and has p value 0.014 with ROE which is
below the significant level p value 0.005. Therefore the null hypothesis is accepted.

H7: Net interest margin has significant impact on performance of private Commercial banks.
The last hypothesis of the study at hand states that net interest margin has significant effect on
performance of private commercial banks and it is measured by the ratio of net interest income to
interest income. It was observed that from regression analysis table of ROA the p value of NIM
is 0.00021 and from that of ROE the p value is 0.014 this is below significant level 0.005 and
indicates NIM significantly affect the performance of private commercial banks, as a result the
null hypothesis is accepted

41
 CHAPTER FIVE
5 Summery, Conclusion and Recommendations
5.1 Summery
This paper has examined the performance of sixteen private commercial banks over a period of
five years 2015-2019 using of the CAMEL model and as dependent variables return on asset and
return on Equity.

The main Purpose of this study was to Evaluate and analyze the financial performance of
Ethiopian private commercial banks based on CAMEL approach and rank the banks according to
their performance as well as to investigate the relationship CAMEL components with
performance measure return on asset (ROA) and return on equity (ROE) as dependent variables
and net interest margin and bank size as explanatory variables in addition to the so called
CAMEL components. The study was conducted in 16 private commercial banks which is all the
population by collecting data from their annual reports from year 2015 to 2019.The research also
tried to answer the research question does the CAMEL components, NIM and Bank SIZE have
effects on the banks performance and to tests the hypothesis whether or not NIM, SIZE and
CAMEL components have a significant effect on the performance of private commercial Banks.
In this research fixed effect regression analysis was applied to test the hypothesis and to examine
the relative effect of explanatory variables to predict the independent variables. Tests of the
assumption of Classical linear regression model were performed by using Correlation matrix,
Breusch-Godfrey Serial Correlation LM Test, Bera Jarque (BJ) test and Breusch-PaganGodfrey
test respectively.

The major findings of the study are the following

The CAMEL rating based on the last five years from 2015 to 2019 average performance of
private commercial banks is as follow.

 The average proportion of capital Adequacy (CAR) which is the ratio of Total Capital
to Total asset of private commercial banks was 14.77% the remaining 85.23% of the
total asset were contributed from debt. On average all private banks debt to equity
ratio 617.8% meaning that for one birr of equity the private banks were liable by Br
617. On the other hand from total asset of private banks 49.72% were loan and
advance granted for customers. During the study Period composite capital adequacy

42
 of private commercial Banks placed Addis International, Enat Bank and Buna Bank
from 1st to 3rd position.
 With regard to Asset quality the study used three ratios to measure the utilization of
resources on average all private banks passed 0.87% of their total asset as provision
for doubtful loan from year 2015 to 2019.The average provision for non performing
loan to total loan were 1.78%. The average provision to equity ratio were 6.6%
meaning that private banks kept 6.6% of their equity as a provision during the study
year. Best performance on the asset quality of private banks ranks Enat Addis and
United banks from the first to the third place and the poorest bank in the asset quality
was cooperative bank of Oromia.
 The third variables in the CAMEL frame work are Management efficiency. The study
was used four ratios to rank management efficiency. As average all private banks
Converted 64.4% of their deposit to loan and advance the highest average
contribution of the ratio was come from Buna Bank. The third management efficiency
measurement is Business per employee. On average 8,969,750.24 Birr deposit and
loan was performed by employee. Each employee of the bank contributes Birr
171,696 net profit per year for their respective banks. The Fourth and the best ratio
measurement of quality of management is expenditure per income, on the average all
private banks incurred 0.56 cents to get a one birr of income. The best performance of
composite management efficiency were recorded by Enat , Zemen and Buna bank
take from 1st to 3rd place, While Bank of Abyssinia ranked in the last place.
 To measure earning quality of the bank the study were used five ratios. The average
net interest margin from total asset of private banks were 4% meaning that private
banks earn 4% of their total asset from interest and the average return on Asset of
banks were 2.5% Addis international bank was contribute the highest ROA of 3.1%.
All private banks profit were growth as an average 45.5% during the research period.
The first three higher contributor of Growth are cooperative bank of Oromia, Debub
Global Bank and Abay bank respectively. The average operating income to total asset
of the industry was 3.24% The Overall performance earning ability of private banks
ranked ANBASA, BUNA and AIB from 1st to 3rd place accordingly.

43
  The last component of CAMEL represented by Liquidity Position Banks the study
applied four ratios to measure the liquidity Position of private banks; all Private
Banks on average were covered 108.1%of their demand deposit and 26.6% of their
total deposit. on the other hand 38.9% of The total deposit of private commercial
banks were term deposit. From the average of the four Liquidity Ratio Results we
found that the DGB,ZB and BIB are the most Liquid bank accordingly and NIB bank
was the list Liquid bank in the study period

Finally from the Overall Composite CAMEL results we evaluate and ranked the performance of
Private commercial banks. Therefore the CAMEL ranked ADDIS international at first position,
Enat Bank at Second position and BUNA bank at the third position. The last position of the
performance was taken by Oromia International Bank due to its poorest result scored in capital
Adequacy and management quality.

With regard to the econometrics analysis the relationship between the selected CAMEL model to
the dependent variable Return on Asset (ROA) Capital Adequacy ratio, Asset Quality ratio and
Management ability Ratio had negative relation with return on asset of private banks and had a
positive relation with liquidity, Net interest income and size of the bank. On the other hand all
explanatory variables except capital adequacy had significant effect at1% significant level.
Capital adequacy ratio was insignificant even at 10%.

Capital adequacy, asset quality and Management efficiency had a negative relation with return
on Equity (ROE) where as there exists a positive relation with the remaining explanatory
variables such as earning, liquidity, net interest margin and size of bank. On the other hand
capital adequacy, management efficiency liquidity and Net interest margin were significant at
1% significant level, but Asset Quality ratio and earnings ratio were insignificant with return on
equity

Furthermore the Assumption of classical linear regression model tests were satisfied as observed
from the correlation matrix, the highest correlation exists between capital adequacy and bank
size which was 0.73. The researcher Consider both the Durbin Watson test and the Breusch-
Godfrey Serial Correlation LM Test to test the auto correlation problem and found that there is
no auto correlation problem in the model for both Dependent variables ROA and ROE the
probability of Chi-Square (2) value is greater than 5%, The Study found that the Probability of
44
Jarque-Bera shows a value 0.94 and 0.87 for ROA and ROE which is greater than 0.05, this
indicates that the residuals are normally distributed. In Order to examine the existence of
heteroscedasticity problem the study was applied Breusch-Pagan-Godfrey test and found that
variance of residuals are homoscedastic, due to the fact that the probability of Chi-Square (9) is
greater than 5% which were 0.590 and 0.330 for ROA & ROE respectively.

The fixed effect regression analysis of ROA adjusted R square value 86.5% meaning that 86.5%
variation on ROA were explained by all the explanatory variables collectively, and from
regression analysis of ROE adjusted R square 0.856 meaning that 85.6% variation on ROE were
explained by all the explanatory variables collectively.

5.2 Conclusion

In this research the importance of CAMEL model parameters on bank performance has been
analyzed, capital adequacy, Asset quality, management efficiency, earning ability and liquidity
in addition Net interest margin and bank size were considered as explanatory variables, while
return on asset and return on equity as measure of bank performance are considered as the
dependent variables. The study utilized various numerous statistical tools like regression
analysis, descriptive analysis, and correlation analysis to analyze the data and interpreted the
findings.
 The composite CAR result showed that the private commercial banks Addis international
and Enat bank took the 1st and 2nd place which were established later and the early
established and the most profitable banks OIB, CBO and ZB took the 1 st to 3rd from the
bottom of the table this might indicates that there is an inverse relationship between age of
banks and profitability with capital adequacy.
 With regard to Asset quality CAMEL model ranked again the newly established bank Enat
and Addis international banks 1st and 2nd place and CBO and ZB were took 1st and 2nd from
the bottom of the table and the relationship between Asset quality and profitability is
negative and significantly affect ROA with 1% significant level and insignificant with ROE.
 Interns of management efficiency Enat, Zemen and United bank rated from 1st to 3rd, BOA
had maintained the last position; Management efficiency had inversely related with
profitability of banks and significantly affects both ROA and ROE.

45
 Anbasa was rated first as earning ability measured followed by Buna and AIB while ZB
rated last On the other hand earning quality had a negative relation with profitability and
significantly affect ROA and insignificant with ROE.
 In terms of Liquidity DGB,ZB and BIB rated from 1st to 3rd place and had a positive
relation with the with the profitability measurement ROA and ROE ,and significant at
significant level of 1%
 According to the overall composite rating of CAMEL , ADDIS, ENAT and BUNA banks
took from the first place to the third place and OIB stood the least place

5.3 Recommendations
On the basis of the finding of the study the researcher recommended the following
The study evaluates the performance of private commercial banks by considering CAMEL
model approach on banks profitability for the year 2015-2019 periods. The paper finds the
CAMEL components, net interest margin and bank size are the driver for the financial
performance of private commercial banks in Ethiopia
 Private commercial banks required to develop their credit risk management ability.
As we found from the asset quality ratio the high level of none performing asset that
is loan and advance affects the profitability of banks .Therefore banks should
improve their credit risk management. In addition the regulatory organs specially
NBE should support and obligate them to have a strong credit risk management
practice.
 The study revealed that the three financial performance measures liquidity ratio, net
interest margin and bank size have a positive and highly significant relationship
with the profitability of banks. Therefore Ethiopian private commercial banks need
to determine the optimum level of liquidity this permits the banks to facilitate extra
mile for the request of loan and generating income and helps to maximize the profit
from interest. On the other hand banks should create and introducing new types of
loan products in order to maximize margin from interest
 Besides the fixed effect regression result sought that the management efficiency
ratio has negatively and significantly affect the profitability of Ethiopian private
banks. Therefore the administration of the bank should manage the cost of the

46
 expenditure and the expenditure to income ratio should be in the reasonable range.
The administration of the bank should pay more consideration of its cost for the
expenditure and make sure that costs of bank are utilized in reasonable way.
 Further more studies uses different ratios to represent each factor of CAMEL, for
example the shareholder‟s equity to assets ratio could represent the capital adequacy
instead of the risk-weighted capital adequacy ratio. Also, more ratios could be
included to represent each factor of CAMEL. Further studies also could extend the
period of data observed and also change the frequency of data used and this might
offer a different result. The restriction of the present study is that it is limited to the
investigation of private sector banks working in Ethiopia. The CAMEL model can
be applied to the investigation of the financial execution of public sector banks and
additionally non-banking financial organizations for further analysis. Accordingly,
in the further research one may need to consider this examination as a source of
perspective to extend the scope and enhance the consequences of the exploration

47
 References
AbdulazeezY.Hazzaasaif (2014) ”financial performances of banks in the kingdom of Saudi
Arabia”, an empirical insight, master thesis, University Utara Malaysia

Anteneh, G.,Arega,S& Yonas,M.(2011) Health check up of commercial banks in

Ethiopia,proceding of National conference on “Loan & Saving):The role in Ethiopian
Socio economic development:

Andrease D,Gabbrielle W,(2009) what determines the profitability of commercial banks? New
evidence from Sewezeland institution of finance service IFZ, Lucerne University of
applied Science

AntenehTeshoma.(2018)Financial Performance analysis of Commercial Banks in Ethiopia: A

CAMEL Approach
AnsarulHaque (2014), Comparison of Financial Performance of Commercial Banks: A case
Study in the Context of India, Journal of Finance and Bank Management June
2014,Vol. 2, No. 2

Athanasoglou et al. (2006,a) on determinants of bank profitability in the South eastern European
region, considering the credit institutions for the period 1988-2002,, pp. 01-14 ISSN:
2333-6064

Ashish Gupta (2015), Comparative study of public and private sector banks in India: An
empirical analysis, International Journal of Applied Research 2015; 1(12): 895-901

Azizi M, Sarkani DYA (2014) Review Financial Performance of Mellat Bank According To
Camel Model. A Journal of Multidisciplinary Research 3.

Babar, HZ& Zeb, G 2011, „CAMELS rating system for banking industry in Pakistan‟,
Mastersthesis, Umeå University, Sweden.

Brooks, C (2008) Introductory Econometrics for Finance, 2nd edn, Cambridge University

Press, New York

48
Chen, J. (2003). Capital adequacy of Chinese banks: Evaluation and enhancement. journal of
international banking regulation, 4 (4), 320-327

Christopoulos A,Nitokas I,(2012) issues of banking and financial Theory;Kritiki Edition,Athens

,Greek.

Creswell, Jw (2009) Research design qualitative, quantitative and mixed methods approach. 3rd
ed. SAGE publication Inc.

Dang, U. (2011).The CAMEL rating system in banking supervision: A case study. Arcada Uni-
versity of Applied Sciences, International Business.

Dash M, Das A (2009)A CAMELS analysis of the Indian banking industry. Social Science
Research Network

Dakito Alemu (2015), Assessment of Banking Performance Using Capital Adequacy in Ethiopia,
Published online October 31, 2015 (http://www.sciencepublishinggroup.com/j/eco)

Geda, A, (2006), “Structure and Performance of Ethiopia‟s financial sector in the pre &

post reform period: with special focus on banking‟, Research paper no. 2006/112,
Addis Ababa University

Gasbarro.D.;Sadegune I G.M.,& Zumawit,J.K (2002) The changing relationship between

CAMEL rating and bank soundness during the Indonesian banking crisis, Review of
quantitative Finance and Accounting

Gulgzoztorul ,(2011) “performance evaluation of banks and banking groups: Turkey case, thesis,
Middle East technical university, 2011, turkey.

G Mohiuddin Use of CAMEL Model: A Study on Financial Performance of Selected

Commercial Banks in Bangladesh Universal Journal of Accounting and Finance,
volume 2, issue 5, p. 151 - 160 Posted: 2014

Guisse, M.L. (2012). Financial performance of the Malaysian banking industry: Domestic vs.
foreign banks, Institute of Graduate Studies and Research

49
Hirtle, Beverly J. and Lopez, Jose A. (1999). “Supervisory Information and the

Frequency of Bank Examination”. FRBNC Economic Review, p. 4.

IrumSaba & RehanaKouser& Muhammad Azeem, 2012. "Determinants of Non ... pages 125-
136, June. Handle: RePEc:rej:journl:v:15:y:2012:i:44:p:125-136.
Jayanta Kumar Nandi (2012), performance evaluation of selected banking companies in India,
The University of Burdwan West Bengal. India 2012.
JonatanGolin.(2001), The bank credit analysis Handbook:AGuid for analysits.Bankers and
Investors.

Karri HK, Meghani K, Mishira BM,(2015) A comparative study in Financial Performance of

Public Sector Banks in India: An Analysis on CAMEL Model

Kauko, K. (2007) Managers and efficiency in banking of Filand.Research Discussion

papers11:1-3

Kumar S, Sharma R,(2014) Performance analysis of top Indian Banks through CAMEL
approach. International Journal of advanced research in management and social
science 3:81-92

Misra SK, Aspal PK (2013) A CAMEL Model Analysis of State Bank Group. World Journal of
Social Sciences 3: 36-35.

Muhmad SN, Hashim HAB (2014) CAMEL Framework and Bank Performance: Evidence in
Malaysia

Mulualem Getahun (2015), Analyzing Financial Performance of Commercial Banks in Ethiopia:

CAMEL Approach, Addis Ababa University, Addis Ababa, Ethiopia

Nishi Sharma & Mayanka (2013), altman model and financial soundness of Indian banks,
University Institute of Applied Management Sciences, Panjab University, Chandigarh,
India International Journal of Accounting and Financial Management Research
(IJAFMR) ISSN 2249-6882 Vol. 3, Issue 2, June 2013, 55-60

50
Nimalathasan, B. (2008), A comparative study of financial performance of banking sector in
Bangladesh - An application of CAMELS rating system. Annals of University of
Bucharest, Economic and Administrative Series, 2, 141-152

Olweny T, Shipho TM (2011) Effects of banking sect oral factors on the profitability of
commercial banks in Kenya. Economics and Finance Review1: 1-30.

Ongore, Vincent Okoth& Kusa, GemechuBerhanu (2013), „Determinants of Financial

Performance of Commercial Banks in Kenya‟, International Journal of Economics and
Financial Issues, vol. 3, no. 1, pp.237-252.

Pastry D, Marobhe M, Kaaya I (2013) the relationship between Capital Structure and
Commercial Bank performance: panel data analysis International Journal of Financial
Economics.

Prasuna, D.G. (2004), Performance Snapshot 2003-04, Chartered Financial Analyst, 10(11), pp.
6-13.

Podviezko, Ginevičius R.(2010).Economic Criteria characterizing bank soundness and

stability.6th international scientific conference May13-14,2010.

Rashid M (2010). Banking Sector Challenges in Bangladesh. The Daily Star

Roman,A.&Sargue,A.C (2013). Analyzing the financial soundness of commercial banks in

Romania; an approach based on the CAMELS frame work

Sundararajan . . . et al. Financial soundness indicators: analytical aspects and country practice
INTERNATIONAL MONETARY FUND Washington DC2002
Swindle, C. S. (1995).Using CAMEL ratings to evaluate regulator effectiveness at commercial
banks. Journal of Financial Services research, 9(2), 123–141
Smirlock, Michael, (1985),“Evidence on the (Non) Relationship between Concentration and
Profitability in Banking”Journal of Money Credit and Banking, Vol. 17, No. 1,
February , pp.69-83

Tom KA.(2012) effects of Camel variables on bank efficiency: panel analysis of kenyan
commercial banks (doctorial Dissertation University of Nairobi).

51
Winkar,AD&Tanko,M 2008,CAMELS and banks performance Evaluation :The way forward,
working papers,SSRN

Zawadi,A, (2013). Comparative analysis of financial performance of commercial banks of

Tanzania, Research journal of Finance and Accounting,

52
Table 4.1 Capital Adequacy Ratio
year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 15.63 15.53 15.04 14.63 16.27 15.42 6
2 ADDIS Int 25.95 25.85 22.07 21.28 20.16 23.06 1
3 AIB 12.63 15.03 13.55 11.75 12.91 13.18 11
4 ANBASA 14.03 12.85 12.65 12.63 12.55 12.94 12
5 BIB 17.42 14.49 17.43 15.65 14.58 15.91 4
6 BOA 13.25 12.62 11.47 13.27 12.60 12.64 13
7 BUNA 15.06 13.63 13.80 15.23 17.72 15.09 7
8 CBO 12.31 9.70 8.14 7.95 7.87 9.19 16
9 DB 11.81 15.16 14.53 12.91 12.18 13.32 10
10 DGB 19.14 23.84 18.66 20.92 18.12 20.13 2
11 ENAT 20.13 19.63 18.37 18.31 16.68 18.62 3
12 NIB 16.42 15.91 14.05 12.67 13.08 14.43 9
13 OIB 10.41 11.63 10.17 10.89 11.68 10.96 15
14 UAITD 11.74 11.72 11.28 10.54 10.80 11.22 14
15 Wogagen 17.61 16.57 15.37 13.97 14.42 15.59 5

16 Zemen 15.69 13.91 13.84 13.64 15.88 14.59 8

Average 15.58 15.50 14.40 14.14 14.22 14.77

Source: Annual Report 2015 – 2019

Table 4.2 Debt Equity Ratio

Year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 540.0% 544.1% 565.0% 583.4% 514.7% 549.4% 6
2 ADDIS Int 285.3% 286.9% 356.7% 369.2% 396.1% 338.8% 1
3 AIB 691.5% 565.2% 638.0% 750.8% 674.3% 664.0% 11
4 ANBASA 612.7% 678.3% 690.4% 691.6% 696.7% 674.0% 12
5 BIB 474.0% 590.3% 473.7% 539.0% 585.7% 532.5% 4
6 BOA 654.9% 692.1% 771.8% 653.4% 693.8% 693.2% 13
7 BUNA 563.9% 633.9% 624.6% 556.5% 464.3% 568.6% 7
8 CBO 712.5% 930.8% 1128.0% 1158.1% 1170.4% 1020.0% 16
9 DB 746.9% 559.7% 588.3% 674.3% 721.1% 658.1% 10
10 DGB 422.4% 319.5% 436.0% 378.1% 451.9% 401.6% 2
11 ENAT 396.9% 409.4% 444.5% 446.2% 499.4% 439.3% 3
12 NIB 508.8% 528.7% 611.6% 689.5% 664.4% 600.6% 9
13 OIB 860.3% 759.6% 883.1% 818.3% 756.0% 815.4% 15
14 UAITD 751.7% 753.4% 786.5% 849.0% 825.9% 793.3% 14
15 Wogagen 467.9% 503.5% 550.6% 615.8% 593.4% 546.2% 5

16 Zemen 537.3% 619.1% 622.7% 633.1% 529.7% 588.4% 8

Average 577.0% 586.0% 636.0% 650.0% 640.0% 617.8%

53
Table 4.3 Loan and Advance to Asset Ratio (Percentage)
year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 50.44 50.39 49.01 47.86 50.29 49.60 10
2 ADDIS Int 44.45 42.48 45.80 48.27 48.02 45.81 13
3 AIB 48.65 49.72 55.96 56.18 62.78 54.66 1
4 ANBASA 48.31 52.69 49.57 51.50 57.00 51.81 6
5 BIB 44.95 51.52 50.13 50.23 52.33 49.83 9
6 BOA 43.21 47.61 54.99 55.59 59.60 52.20 5
7 BUNA 53.74 52.50 52.73 52.54 56.22 53.55 2
8 CBO 57.28 53.01 53.49 49.22 51.22 52.85 4
9 DGB 29.29 45.25 37.30 47.65 43.76 40.65 16
10 DB 45.76 42.07 49.70 50.76 57.57 49.17 12
11 ENAT 51.31 49.66 50.26 51.12 55.35 51.54 8
12 NIB 52.01 47.45 50.96 50.58 57.09 51.62 7
13 OIB 49.36 45.91 43.40 41.89 48.22 45.76 14
14 UAITD 47.19 49.20 54.53 53.05 60.48 52.89 3
15 Wogagen 44.28 45.84 48.30 53.98 54.07 49.29 11
16 Zemen 44.25 43.97 40.89 40.16 51.80 44.21 15
Average 47.15 48.09 49.19 50.04 54.11 49.72
Source: Annual Report 2015 – 2019

Table 4.4 Composite Capital Adequacy

Composite Capital Adequacy
Capital Adequacy Debt To Equity Loan And Advance To Asset
Bank % Rank Times Rank % Rank Rate Comp Rank
Abay 15.42 6 5.5 6 49.6 10 7.3 5
ADDIS Int 23.06 1 6.6 11 54.7 1 4.3 1
AIB 13.18 11 5.3 4 49.8 9 8.0 7
ANBASA 12.94 12 6.7 12 51.8 6 10.0 12
BIB 15.91 4 6.9 13 52.2 5 7.3 6
BOA 12.64 13 3.4 1 45.8 13 9.0 10
BUNA 15.09 7 5.7 7 53.5 2 5.3 3
CBO 9.19 16 10.2 16 52.8 4 12.0 15
DGB 20.13 2 6.6 10 49.2 12 8.0 8
DIB 13.32 10 4.0 2 40.7 16 9.3 11
ENAT 18.62 3 4.4 3 51.5 8 4.7 2
NIB 14.43 9 6.0 9 51.6 7 8.3 9
OIB 10.96 15 8.2 15 45.8 14 14.7 16
UAITD 11.22 14 7.9 14 52.9 3 10.3 13
Wogagen 15.59 5 5.5 5 49.3 11 7.0 4
Zemen 14.59 8 5.9 8 44.2 15 10.3 14

54
Table 4.5 Provision for NPL to Total Asset
year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 0.64 0.71 0.56 0.85 0.76 0.70 8
2 ADDIS Int 0.54 0.50 0.40 0.52 0.52 0.50 2
3 AIB 0.86 0.77 0.63 0.46 0.55 0.65 4
4 ANBASA 0.81 1.03 1.25 1.31 1.13 1.11 14
5 BIB 0.63 0.79 0.74 0.73 0.62 0.70 7
6 BOA 0.66 0.65 0.70 0.66 0.80 0.69 6
7 BUNA 0.62 1.31 0.61 0.77 0.91 0.85 11
8 CBO 1.36 3.10 2.39 1.20 1.81 1.97 16
9 DGB 0.35 0.65 0.81 0.83 0.92 0.71 9
10 DIB 0.73 0.79 0.93 0.50 0.37 0.67 5
11 ENAT 0.54 0.13 0.32 0.32 0.43 0.35 1
12 NIB 0.79 0.85 0.84 0.77 0.56 0.76 10
13 OIB 0.64 1.08 1.08 0.67 0.86 0.86 12
14 UB 0.58 0.49 0.44 0.70 0.33 0.51 3
15 WB 0.71 1.02 0.96 0.96 1.19 0.97 13
16 ZB 2.59 1.97 2.00 1.79 1.15 1.90 15
Average 0.82 0.99 0.92 0.81 0.81 0.87

Table 4.6 Provision for NPL to Total Loan

year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 1.27 1.41 1.15 1.77 1.50 1.42 8
ADDIS
2 Int 1.21 1.19 0.88 1.08 1.09 1.09 3
3 AIB 1.77 1.55 1.13 0.82 0.87 1.23 4
4 ANBASA 1.69 1.96 2.52 2.54 1.98 2.14 14
5 BIB 1.40 1.53 1.47 1.45 1.18 1.41 7
6 BOA 1.53 1.37 1.28 1.18 1.34 1.34 5
7 BUNA 1.16 2.49 1.16 1.47 1.62 1.58 10
8 CBO 2.37 5.84 4.47 2.44 3.53 3.73 15
9 DB 1.60 1.87 1.87 0.99 0.65 1.40 6
10 DGB 1.19 1.45 2.17 1.75 2.10 1.73 11
11 ENAT 1.04 0.27 0.63 0.62 0.77 0.67 1
12 NIB 1.53 1.80 1.65 1.52 0.99 1.50 9
13 OIB 1.29 2.35 2.49 1.59 1.78 1.90 12
14 UB 1.24 1.01 0.81 1.32 0.54 0.98 2
15 WB 1.61 2.22 2.00 1.78 2.21 1.96 13
16 ZB 5.86 4.48 4.90 4.45 2.21 4.38 16
Average 1.73 2.05 1.91 1.67 1.52 1.78
Source: Annual Report 2015 – 2019

55
Table 4.7 Provision for NPL to Equity Percentage
year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 4.10 4.56 3.74 5.78 4.65 4.57 6
2 ADDIS Int 2.07 1.95 1.83 2.45 2.60 2.18 2
3 AIB 6.82 5.12 4.65 3.93 4.22 4.95 7
4 ANBASA 5.81 8.03 9.89 10.35 8.99 8.61 14
5 BIB 3.63 5.45 4.22 4.67 4.25 4.44 4
6 BOA 4.99 5.17 6.13 4.95 6.34 5.51 10
7 BUNA 4.14 9.61 4.42 5.08 5.13 5.67 11
8 CBO 11.02 31.91 29.33 15.08 22.94 22.06 16
9 DGB 1.82 2.74 4.34 3.98 5.08 3.59 3
10 DIB 6.19 5.19 6.41 3.89 3.07 4.95 8
11 ENAT 2.66 0.69 1.73 1.74 2.56 1.88 1
12 NIB 4.83 5.37 6.00 6.07 4.31 5.31 9
13 OIB 6.10 9.29 10.62 6.13 7.33 7.89 13
14 UB 4.97 4.22 3.93 6.63 3.03 4.56 5
15 WB 4.04 6.15 6.27 6.86 8.28 6.32 12
16 ZB 16.51 14.18 14.48 13.11 7.21 13.10 15
Average 5.61 7.48 7.37 6.29 6.25 6.60
Source: Annual Report 2015 – 2019

Table 4.8 Composite Ratio for Asset Quality

Composite Ratio for Asset Quality
NPLSTA NPLSTL NPLSTE
Bank % Rank % Rank % Rank Rate Comp Rank
Abay 0.70 8 1.418699 8.0 4.6 6 7.3 8
ADDIS Int 0.50 2 1.089066 3.0 2.2 2 2.3 2
AIB 0.65 4 1.226955 4.0 4.9 7 5.0 4
ANBASA 1.11 14 2.137667 14.0 8.6 14 14.0 14
BIB 0.70 7 1.408817 7.0 4.4 4 6.0 5
BOA 0.69 6 1.339959 5.0 5.5 10 7.0 7
BUNA 0.85 11 1.579902 10.0 5.7 11 10.7 11
CBO 1.97 16 3.726595 15.0 22.1 16 15.7 16
DGB 0.71 9 1.731101 11.0 3.6 3 7.7 9
DIB 0.67 5 1.396271 6.0 5.0 8 6.3 6
ENAT 0.35 1 0.668686 1.0 1.9 1 1.0 1
NIB 0.76 10 1.497143 9.0 5.3 9 9.3 10
OIB 0.86 12 1.900135 12.0 7.9 13 12.3 12
UB 0.51 3 0.982743 2.0 4.6 5 3.3 3
WB 0.97 13 1.962355 13.0 6.3 12 12.7 13
ZB 1.90 15 4.380747 16.0 13.1 15 15.3 15

56
Table 4.9 None Int. Expense to Net Income & Other Income
year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 0.53 0.57 0.59 0.50 0.50 0.54 5
2 ADDIS Int 0.51 0.50 0.57 0.59 0.54 0.54 6
3 AIB 0.48 0.52 0.52 0.50 0.50 0.50 2
4 ANBASA 0.43 0.46 0.58 0.53 0.53 0.51 3
5 BIB 0.54 0.46 0.51 0.63 0.62 0.55 10
6 BOA 0.55 0.57 0.60 0.64 0.61 0.59 13
7 BUNA 0.54 0.55 0.56 0.56 0.53 0.55 8
8 CBO 0.56 0.96 0.66 0.65 0.71 0.71 16
9 DGB 0.75 0.56 0.76 0.57 0.60 0.65 15
10 DB 0.47 0.52 0.55 0.60 0.63 0.55 9
11 ENAT 0.52 0.52 0.57 0.50 0.53 0.53 4
12 NIB 0.51 0.56 0.52 0.58 0.55 0.54 7
13 OIB 0.58 0.65 0.65 0.51 0.55 0.59 12
14 UAITD 0.61 0.60 0.63 0.59 0.58 0.60 14
15 Wogagen 0.55 0.58 0.56 0.53 0.65 0.58 11
16 Zemen 0.45 0.46 0.41 0.49 0.40 0.44 1
Average 0.54 0.56 0.58 0.56 0.56 0.56
Source: Annual Report 2015 – 2019

Table 4.10 Net Profit per EMPL

year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 106,893 138,474 151,957 230,702 152,737 156,153 8
2 ADDIS Int 87,479 90,439 221,775 218,808 276,974 179,095 6
3 AIB 202,276 237,099 140,518 189,370 268,940 207,641 4
4 ANBASA 189,398 203,693 176,850 213,650 234,669 203,652 5
5 BIB 110,371 123,899 110,713 101,281 118,849 113,022 14
6 BOA 88,526 143,358 106,839 96,618 118,919 110,852 15
7 BUNA 180,058 199,410 202,942 225,833 260,513 213,751 3
8 CBO 159,652 17,111 114,407 149,334 150,552 118,211 13
9 DGB 158,611 129,139 56,398 193,528 288,651 165,265 7
10 DIB 45,738 108,141 111,665 103,794 104,467 94,761 16
11 ENAT 272,379 274,228 248,236 339,476 373,369 301,538 2
12 NIB 128,556 116,448 140,300 118,849 144,961 129,823 12
13 OIB 91,463 86,221 97,062 222,812 204,511 140,414 9
14 UAITD 96,309 105,514 113,224 153,954 185,115 130,823 11
15 Wogagen 119,554 110,965 105,510 190,529 136,146 132,541 10
16 Zemen 354,118 358,877 361,927 374,338 546,633 399,179 1
Average 149,461.25 152,688.46 138,276.00 195,180.00 222,875.00 171696
Source: Annual Report 2015 – 2019

57
 Table 4.11 Business Function per Employee
No Bank year
2015 2016 2017 2018 2019 Average Rank
Abay 6,775,283 7,516,068 8,859,888 11,255,127 5,845,178 8,050,309 9
1
ADDIS Int 6,455,011 7,256,476 8,961,246 9,700,335 11,469,697 8,768,553 7
2
AIB 5,265,161 6,338,011 7,840,176 9,453,170 11,769,968 8,133,297 8
3
ANBASA 6,875,437 8,284,231 9,384,154 10,395,642 12,198,103 9,427,513 4
4
BIB 4,185,759 4,957,672 4,530,815 5,547,126 6,492,211 5,142,717 15
5
BOA 5,174,284 5,223,594 6,918,692 7,480,773 8,504,392 6,660,347 14
6
BUNA 7,923,672 9,612,418 10,902,904 12,026,488 10,579,322 10,208,961 3
7
CBO 7,120,105 6,272,959 8,051,187 11,560,375 13,177,567 9,236,439 5
8
DGB 3,069,830 3,060,763 4,122,804 6,727,829 8,115,903 5,019,426 16
9
DIB 6,775,548 6,258,820 6,268,174 6,597,132 7,920,240 6,763,983 13
10
ENAT 13,840,163 13,905,511 15,228,910 17,958,284 23,212,387 16,829,051 2
11
NIB 6,357,041 6,508,328 7,369,666 8,106,622 9,435,676 7,555,467 11
12
OIB 5,242,296 5,039,402 6,688,454 9,153,579 11,492,448 7,523,236 12
13
UAITD 6,361,032 6,854,999 8,684,385 10,184,900 12,473,278 8,911,719 6
14
Wogagen 5,525,666 5,722,914 9,652,946 8,473,270 8,691,331 7,613,225 10
15
Zemen 13,778,686 15,474,665 16,326,680 21,044,649 21,734,131 17,671,762 1
16
6,920,310.76 7,392,926.96 8,736,942.47 10,354,081.42 11,444,489.60 8,969,750.24
Average
Source: Annual Report 2015 – 2019
Table 4.12 Advance to Total Deposit
year
No Bank
2015 2016 2017 2018 2019 Average Rank
1 Abay 63.8 64.5 62.7 61.7 65.5 63.6 12
2 ADDIS Int 67.7 66.9 66.8 68.5 67.1 68.0 4
3 AIB 62.9 62.8 68.1 67.6 75.0 67.3 5
4 ANBASA 63.5 67.6 61.9 63.4 70.9 65.5 8
5 BIB 61.1 70.1 69.6 64.5 67.0 66.5 6
6 BOA 53.1 58.8 67.3 68.9 72.9 64.2 11
7 BUNA 69.1 66.6 69.4 68.8 77.0 70.2 1
8 CBO 89.1 65.7 68.6 59.0 59.2 68.3 2
9 DGB 40.9 67.5 53.8 72.2 68.1 60.5 14
10 DIB 57.2 55.3 64.4 64.1 72.4 62.7 13
11 ENAT 72.4 67.8 66.6 65.1 68.5 68.1 3
12 NIB 70.5 60.5 65.2 62.4 69.6 65.7 7
13 OIB 58.8 55.0 52.5 50.0 57.6 54.8 16
14 UAITD 57.4 62.7 67.4 64.4 74.3 65.3 10
15 Wogagen 59.4 62.4 64.3 72.1 68.4 65.3 9
16 Zemen 56.4 59.7 49.8 48.8 65.5 56.0 15
Average 62.8 63.4 63.7 63.7 68.7 64.4
Source: Annual Report 2015 – 2019

58
Table 4.13 Composite of management Efficiency
Composite management efficiency
None int.
Expense to Advance to Net profit per Businee per
Op Income Deposit Employee Employee
Comp
Bank % Rank % Rank % Rank times Rank Rate Rank
Abay 0.54 5 63.63425 12 156153 8 8,050,309 9 8.5 7
ADDIS Int 0.54 6 68.02137 4 179095 6 8,768,553 7 5.8 6
AIB 0.50 2 67.28005 5 207641 4 8,133,297 8 4.8 4
ANBASA 0.51 3 65.45126 8 203652 5 9,427,513 4 5.0 5
BIB 0.55 10 66.45335 6 113022 14 5,142,717 15 11.3 12
BOA 0.59 13 64.18817 11 110852 15 6,660,347 14 13.3 16
BUNA 0.55 8 70.15891 1 213751 3 10,208,961 3 3.8 2
CBO 0.71 16 68.31478 2 118211 13 9,236,439 5 9.0 8
DGB 0.65 15 60.51103 14 165265 7 5,019,426 16 13.0 15
DIB 0.55 9 62.67552 13 94761 16 6,763,983 13 12.8 14
ENAT 0.53 4 68.0738 3 301538 2 16,829,051 2 2.8 1
NIB 0.54 7 65.655 7 129823 12 7,555,467 11 9.3 9
OIB 0.59 12 54.79742 16 140414 9 7,523,236 12 12.3 13
UAITD 0.60 14 65.25325 10 130823 11 8,911,719 6 10.3 11
Wogagen 0.58 11 65.32226 9 132541 10 7,613,225 10 10.0 10
Zemen 0.44 1 56.02404 15 399179 1 17,671,762 1 4.5 3

Table 4.14 NIM per To T Asset

year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 3.9 4.4 3.9 4.2 4.2 4.1 10
2 ADDIS Int 3.2 3.5 3.3 3.6 3.6 3.4 13
3 AIB 3.3 3.7 4.7 4.9 5.2 4.4 7
4 ANBASA 3.8 4.4 4.8 5.2 5.2 4.7 2
5 BIB 3.3 4.5 4.4 4.9 4.9 4.4 6
6 BOA 3.5 3.8 3.9 5.2 5.1 4.3 8
7 BUNA 4.9 4.6 3.8 4.9 5.8 4.8 1
8 CBO 4.9 5.7 4.4 4.1 4.3 4.7 3
9 DB 3.0 2.6 3.2 4.0 4.2 3.4 14
10 DGB 2.3 4.5 3.1 4.1 3.2 3.5 12
11 ENAT 2.8 2.4 2.0 2.7 2.8 2.6 15
12 NIB 4.5 4.7 4.6 4.5 4.9 4.6 4
13 OIB 3.8 4.7 3.6 4.0 4.3 4.1 11
14 UAITD 4.2 4.0 4.1 4.4 4.7 4.3 9
15 Wogagen 4.1 4.2 4.2 5.0 5.0 4.5 5
16 Zemen 2.6 2.2 1.9 2.2 3.3 2.4 16
Average 3.6 4.0 3.7 4.3 4.4 4.0
Source: Annual Report 2015 – 2019

59
Table 4.15 Net Profit to Asset
year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 2.7 2.4 2.2 2.6 3.3 2.6 8
2 ADDIS Int 3.4 3.5 2.8 2.7 2.9 3.1 1
3 AIB 2.6 2.4 2.4 2.7 3.3 2.7 7
4 ANBASA 3.4 3.2 2.4 2.7 2.6 2.9 2
5 BIB 2.5 3.6 3.0 2.3 2.4 2.8 5
6 BOA 2.1 2.2 2.1 1.8 2.0 2.036 14
7 BUNA 3.0 2.7 2.4 2.4 3.2 2.7 6
8 CBO 2.7 0.4 1.9 1.8 1.6 1.7 16
9 DB 2.9 2.4 2.3 2.0 1.8 2.298 12
10 DGB 1.5 4.0 1.5 3.3 3.8 2.8 4
11 ENAT 2.4 2.4 2.0 2.5 2.2 2.3 11
12 NIB 2.5 2.3 2.5 1.9 2.1 2.3 13
13 OIB 2.3 2.2 1.8 3.1 2.3 2.4 10
14 UAITD 2.0 2.0 1.8 2.0 2.1 2.0 15
15 Wogagen 2.6 2.3 2.5 2.9 2.1 2.5 9
16 Zemen 3.2 2.7 2.7 2.2 3.3 2.815 3
Average 2.6 2.5 2.3 2.4 2.6 2.5
Source: Annual Report 2015 – 2019

Table 4.16 Net Profit Growth

year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 118.0 16.8 29.5 67.0 58.2 57.9 3
2 ADDIS Int 31.3 45.5 12.0 18.1 41.1 29.6 11
3 AIB 4.3 15.3 27.9 56.8 63.0 33.5 9
4 ANBASA 107.8 30.3 2.6 45.6 37.9 44.8 6
5 BIB 17.1 148.9 21.9 3.4 39.7 46.2 5
6 BOA 6.3 30.2 42.7 5.2 38.1 24.5 12
7 BUNA 68.0 39.1 26.6 33.1 46.3 42.6 8
8 CBO -9.1 -87.5 764.6 54.8 25.7 149.7 1
9 DB 2.3 -0.3 12.1 14.0 9.5 7.5 16
10 DGB 22.0 200.6 -41.6 253.4 97.6 106.4 2
11 ENAT 84.6 48.7 26.4 59.2 26.9 49.1 4
12 NIB 7.0 5.8 44.8 -0.3 40.0 19.5 14
13 OIB 43.7 12.0 19.8 144.5 2.5 44.5 7
14 UB 1.1 20.5 14.6 47.6 31.1 23.0 13
15 Wogagen 9.4 6.6 38.1 53.0 -21.7 17.1 15
16 ZB 19.7 31.9 31.2 1.9 78.5 32.6 10
Average 33.3 35.3 67.1 53.6 38.4 45.5
Source: Annual Report 2015 – 2019

60
Table 4.17 Operating Income to Total Asset
year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 4.01 3.40 3.07 3.40 4.43 3.66 4
3 ADDIS Int 4.58 4.58 3.62 3.29 3.72 3.96 1
5 AIB 3.42 3.22 3.28 3.55 3.90 3.47 7
4 ANBASA 4.70 4.27 2.85 3.35 3.41 3.718 3
6 BIB 3.32 4.85 4.07 2.92 3.03 3.64 6
2 BOA 2.74 3.01 2.78 2.39 2.61 2.71 14
7 BUNA 4.04 3.67 2.99 3.28 4.31 3.66 5
8 CBO 4.20 0.35 2.42 2.24 1.84 2.21 16
9 DB 3.89 3.18 2.93 2.52 2.28 2.96 11
10 DGB 1.98 5.22 1.95 4.34 3.84 3.47 8
11 ENAT 2.92 3.14 2.64 3.34 2.52 2.91 13
12 NIB 3.33 2.90 3.24 2.45 2.75 2.93 12
13 OIB 3.08 2.90 2.41 3.94 3.15 3.10 10
14 UAITD 2.57 2.63 2.24 2.51 2.74 2.54 15
15 Wogagen 3.30 2.96 3.38 3.83 2.47 3.19 9
16 Zemen 4.12 3.62 3.78 2.75 4.33 3.721 2
Average 3.51 3.37 2.98 3.13 3.21 3.24
Source: Annual Report 2015 – 2019

Table 4.18 Interest Income to Total Income

year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 56.7 65.2 63.9 66.4 60.1 62.4 13
2 ADDIS Int 46.1 50.8 52.9 58.9 60.7 53.9 15
3 AIB 63.5 68.1 74.3 77.7 74.2 71.6 5
4 ANBASA 51.2 58.9 73.2 77.8 75.4 67.3 9
5 BIB 56.4 58.6 59.1 71.9 69.6 63.1 12
6 BOA 70.7 67.2 66.8 122.7 126.0 90.7 1
7 BUNA 63.9 66.8 68.2 74.2 70.0 68.6 7
8 CBO 57.2 76.4 73.2 75.6 77.1 71.9 4
9 DB 56.2 55.7 60.6 98.7 76.9 69.6 6
10 DGB 42.5 43.4 43.7 50.8 46.3 45.3 16
11 ENAT 63.9 58.2 59.8 65.2 75.6 64.5 10
12 NIB 73.8 79.7 77.0 83.6 85.6 79.9 2
13 OIB 60.9 65.6 61.0 61.0 68.6 63.4 11
14 UAITD 73.8 73.3 77.3 78.4 84.5 77.5 3
15 Wogagen 64.4 66.8 62.9 68.5 79.4 68.4 8
16 Zemen 52.3 52.2 50.7 62.7 64.1 56.4 14
Average 59.6 62.9 64.0 74.6 74.6 67.1
Source: Annual Report 2015 – 2019

61
 Table 4.19 Composite Earning Quality Ratio
Composite Earning Quality Ratio
Bank NIM/A Asset Net Profit to Asset Net Percentage Operating Income to Interest Income to Aver. Comp
Profit Growth Total Asset Total Income Rate Rank
Average Rank Average Rank Average Rank Average Rank Average Rank
Abay 4.10 10 2.6 8.0 57.9 3.0 4.0 1 62.4 13 7.0 6
ADDIS Int 3.44 13 3.1 1.0 29.6 11.0 3.7 2 53.9 15 8.4 8
AIB 4.36 7 2.7 7.0 33.5 9.0 3.7 3 71.6 5 6.2 3
ANBASA 4.67 2 2.9 2.0 44.8 6.0 3.7 4 67.3 9 4.6 1
BIB 4.40 6 2.8 5.0 46.2 5.0 3.7 5 63.1 12 6.6 5
BOA 4.31 8 2.0 14.0 24.5 12.0 3.6 6 90.7 1 8.2 7
BUNA 4.82 1 2.7 6.0 42.6 8.0 3.5 7 68.6 7 5.8 2
CBO 4.67 3 1.7 16.0 149.7 1.0 3.5 8 71.9 4 6.4 4
DB 3.41 14 2.3 12.0 7.5 16.0 3.2 9 69.6 6 11.4 15
DGB 3.47 12 2.8 4.0 106.4 2.0 3.1 10 45.3 16 8.8 9
ENAT 2.57 15 2.3 11.0 49.1 4.0 3.0 11 64.5 10 10.2 11
NIB 4.63 4 2.3 13.0 19.5 14.0 2.9 12 79.9 2 9.0 10
OIB 4.09 11 2.4 10.0 44.5 7.0 2.9 13 63.4 11 10.4 12
UAITD 4.29 9 2.0 15.0 23.0 13.0 2.7 14 77.5 3 10.8 14

Wogagen 4.50 5 2.5 9.0 17.1 15.0 2.5 15 68.4 8 10.4 13

Zemen 2.41 16 2.8 3 33 10 2 16 56.4 14 11.8 16

Table 4.20 Liquid Asset to Demand Deposit

year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 96.5 97.0 125.6 140.7 128.8 117.7 6
2 ADDIS Int 148.6 182.6 137.7 144.6 141.9 151.1 4
3 AIB 91.5 100.9 85.4 89.5 60.1 85.5 11
4 ANBASA 111.7 86.8 124.0 128.3 132.9 116.8 7
5 BIB 120.2 87.2 124.5 68.6 58.4 91.8 9
6 BOA 112.3 91.1 59.4 79.8 82.1 84.9 12
7 BUNA 72.2 87.0 107.0 119.6 96.4 96.5 8
8 CBO 72.2 73.9 74.9 86.1 66.6 74.7 14
9 DB 116.1 115.7 77.9 84.8 59.8 90.9 10
10 DGB 141.0 74.9 129.3 141.2 139.4 125.2 5
11 ENAT 171.9 125.2 156.6 147.9 207.0 161.7 1
12 NIB 60.0 71.9 68.4 81.6 73.0 71.0 15
13 OIB 481.3 65.5 78.1 95.5 70.9 158.3 2
14 UB 94.6 89.4 73.1 97.5 64.3 83.8 13

15 Wogagen 60.0 68.3 67.3 54.3 69.6 63.9 16

16 Zemen 246.0 142.6 173.7 151.6 63.7 155.5 3
Average 137.3 97.5 103.9 107.0 94.7 108.1
Source: Annual Report 2015 – 2019

62
Table 4.21 Liquid Asset to Total Deposit
year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 24.6 23.3 27.0 30.5 28.1 26.7 7
2 ADDIS Int 44.1 49.1 40.6 34.9 33.6 40.5 4
3 AIB 19.9 23.9 21.4 25.3 18.2 21.7 13
4 ANBASA 34.4 23.9 25.4 25.9 22.0 26.3 8
5 BIB 40.5 29.4 31.6 24.8 20.9 29.4 5
6 BOA 25.9 22.8 16.6 17.4 13.9 19.3 14
7 BUNA 23.4 23.3 27.6 26.8 21.6 24.5 10
8 CBO 31.5 25.8 24.4 29.7 19.8 26.3 9
9 DB 27.9 24.7 18.9 19.6 13.6 20.9 1
10 DGB 56.8 28.7 47.7 38.3 44.9 43.3 2
11 ENAT 34.2 29.6 29.8 25.7 22.8 28.4 6
12 NIB 18.4 24.0 20.0 18.0 14.2 18.9 16
13 OIB 20.9 23.0 24.7 29.2 19.3 23.4 11
14 UB 23.1 21.5 17.9 19.6 13.2 19.0 15
15 Wogagen 23.9 26.1 24.9 19.7 18.2 22.6 12
16 Zemen 30.1 40.2 39.7 39.6 21.7 34.3 3
Average 30.0 27.4 27.4 26.6 21.6 26.6
Source: Annual Report 2015 – 2019

Table 4.22 Liquid Assets to Total Assets

year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 19.5 18.2 21.1 23.7 21.6 20.8 6
2 ADDIS Int 28.5 31.2 27.0 24.6 24.0 27.1 3
3 AIB 15.4 18.9 17.6 21.0 15.2 17.6 11
4 ANBASA 26.2 18.7 20.3 21.1 17.7 20.8 7
5 BIB 29.8 21.6 22.8 19.3 16.3 22.0 4
6 BOA 21.1 18.4 13.6 14.0 11.4 15.7 14
7 BUNA 18.2 18.3 21.0 20.5 15.8 18.8 10
8 CBO 20.3 20.8 19.6 25.7 17.2 20.7 8
9 DB 22.3 23.0 14.6 15.5 10.8 17.2 12
10 DGB 40.7 19.2 33.1 25.3 28.8 29.4 2
11 ENAT 24.2 21.7 22.5 20.2 18.4 21.4 5
12 NIB 13.6 18.8 15.6 14.6 11.7 14.8 16
13 OIB 17.6 19.2 20.4 24.4 16.1 19.5 9
14 UB 19.0 16.8 14.5 16.1 10.7 15.4 15
15 Wogagen 17.8 19.2 18.7 14.8 14.4 17.0 13
16 Zemen 51.5 29.6 32.6 32.6 17.2 32.7 1
Average 24.1 20.9 20.9 20.8 16.7 20.7
Source: Annual Report 2015 – 2019

63
Table 4.23 Term Deposits to Total Deposit
year
No Bank 2015 2016 2017 2018 2019 Average Rank
1 Abay 12.5 11.5 20.2 14.1 8.1 13.3 10
2 ADDIS Int 29.1 31.4 30.2 33.1 33.9 31.5 15
3 AIB 18.6 8.9 7.0 6.8 6.3 9.5 5
4 ANBASA 10.5 8.3 11.4 8.6 7.8 9.3 4
5 BIB 8.5 9.3 12.2 10.2 8.7 9.8 6
6 BOA 8.0 6.4 11.8 16.3 13.3 11.2 8
7 BUNA 15.5 22.1 19.7 11.0 1.8 14.0 11
8 CBO 2.6 7.9 4.6 2.0 4.1 4.2 1
9 DB 7.4 5.7 9.1 13.3 9.2 8.9 3
10 DGB 14.0 9.5 6.7 15.0 13.0 11.6 9
11 ENAT 37.2 36.5 44.2 38.4 38.4 39.0 16
12 NIB 13.5 14.0 15.0 17.8 16.4 15.4 14
13 OIB 42.2 8.0 7.8 6.8 9.0 14.8 13
14 UD 11.0 11.7 12.9 9.4 10.7 11.1 7
15 Wogagen 4.2 5.0 5.3 12.7 17.3 8.9 2
16 Zemen 13.1 22.3 13.6 10.1 11.1 14.0 12
Average 15.5 137.3 14.5 14.1 13.1 38.9
Source: Annual Report 2015 – 2019

Table 4.24 Composite Liquidity Ratio

Composite Liquidity Ratio
Liquid Asset Liq Asset To
Demand Liq Asset T Depo Asset Liq Asset T Demand De
Average Comp
Bank Average Rank Average Rank Average Rank Average Rank Rate Rank
Abay 117.74 6 26.7 7.0 20.8 6.0 13.3 10 7.3 8
ADDIS Int 151.09 4 40.5 4.0 27.1 3.0 31.5 15 6.5 4
AIB 85.47 11 21.7 13.0 17.6 11.0 9.5 5 10.0 12
ANBASA 116.76 7 26.3 8.0 20.8 7.0 9.3 4 6.5 5
BIB 91.76 9 29.4 5.0 22.0 4.0 9.8 6 6.0 3
BOA 84.92 12 19.3 14.0 15.7 14.0 11.2 8 12.0 14
BUNA 96.46 8 24.5 10.0 18.8 10.0 14.0 11 9.8 11
CBO 74.73 14 26.3 9.0 20.7 8.0 4.2 1 8.0 9
DB 90.87 10 20.9 1.0 17.2 12.0 8.9 3 6.5 6
DGB 125.17 5 43.3 2.0 29.4 2.0 11.6 9 4.5 1
ENAT 161.72 1 28.4 6.0 21.4 5.0 39.0 16 7.0 7
NIB 71.00 15 18.9 16.0 14.8 16.0 15.4 14 15.3 16
OIB 158.26 2 23.4 11.0 19.5 9.0 14.8 13 8.8 10
UAITD 83.78 13 19.0 15.0 15.4 15.0 11.1 7 12.5 15
Wogagen 63.92 16 22.6 12.0 17.0 13.0 8.9 2 10.8 13
Zemen 155.51 3 34.3 3 33 1 14 12 4.8 2

64
Table 4.25 Composite of CAMEL
Composite of CAMEL
Bank CA AQ ME EQ LQ RATE RANK
ABAY 5 8 7 6 8 6.8 6
ADDIS Int 1 2 6 8 4 4.2 1
AIB 7 4 4 3 12 6 4
ANBASA 12 14 5 1 5 7.4 7
BIB 6 5 12 5 3 6.2 5
BOA 10 7 16 7 14 10.8 13
BUNA 3 11 2 2 11 5.8 3
CBO 15 16 8 4 9 10.4 10
DB 8 9 15 15 6 10.6 11
DGB 11 6 14 9 1 8.2 8
ENAT 2 1 1 11 7 4.4 2
NIB 9 10 9 10 16 10.8 14
OIB 16 12 13 12 10 12.6 16
UB 13 3 11 14 15 11.2 15
Wogagen 4 13 10 13 13 10.6 12
ZB 14 15 3 16 2 10 9
Source NBE

65
Annex 1 List of commercial banks operating in Ethiopia
Number Bank name Year of Establishment
1 Development Bank of Ethiopia 1909
2 Commercial Bank Of Ethiopia 1963
3 Awash International Bank 1994
4 Dashen Bank 1995
5 Bank of Abyssinia 1996
6 Wegagen Bank 1997
7 United Bank 1998
8 Nib international Bank 1999
9 Cooperative Bank of Oromia 2004
10 Lion International Bank 2006
11 Oromia International Bank 2008
12 Zemen Bank 2008
13 Bunna International Bank 2009
14 Birhan International Bank 2009
15 Abay Bank 2010
16 Addis International Bank 2011
17 Debub Global Bank 2012
18 Enat Bank 2012
Source NBE

66
Annex 2 Lists of Commercial Banks under formation
No Name of Banks
1 Goh Mortgage Bank
2 Amihara Bank
3 Geda Bank
4 Diaspora Bank
5 Kush Bank
6 Ahidu Bank
7 Akufada Bank
8 Sheger Bank
9 Jano Bank
10 Hijira Bank
11 Hadiya Bank
12 Zemzem Bank

67
Annex 3 Ratio used for Econometrics Analysis
YEA MGT
Banks R ROA ROE CAR AQ Q ERNQ LIQ NIM SIZE
17.52 1.26 19.46 62.17
Abay 2015 2.738 2 15.625 9 0.535 118.000 2 2 9.661
15.25 1.40 18.23 64.42
Abay 2016 2.368 3 15.525 6 0.567 16.783 1 6 9.791
14.52 1.14 21.07 57.51
Abay 2017 2.183 1 15.037 6 0.590 29.548 4 8 9.939
17.57 1.76 23.68 59.00 10.09
Abay 2018 2.572 6 14.633 7 0.498 67.016 3 6 1
20.41 1.50 21.60 57.51 10.17
Abay 2019 3.320 1 16.268 5 0.505 58.237 0 8 9
13.18 1.20 28.54 56.53 10.13
Addis 2015 3.420 0 25.952 8 0.506 31.300 2 7 6
13.41 1.18 31.16 57.80 10.22
Addis 2016 3.467 1 25.849 8 0.495 45.509 6 2 6
12.68 0.88 27.04 48.97 10.40
Addis 2017 2.799 5 22.068 0 0.572 11.984 2 0 4
12.58 1.07 24.58 53.15 10.50
Addis 2018 2.678 6 21.278 8 0.586 18.120 4 9 5
14.32 1.09 24.04 48.97 10.59
Addis 2019 2.888 7 20.157 1 0.543 41.057 8 0 4
20.26 1.77 15.39 56.28
AIB 2015 2.560 2 12.634 0 0.482 4.300 8 8 9.234
16.16 1.54 18.92 59.33
AIB 2016 2.430 6 15.034 9 0.517 15.252 8 7 9.391
18.49 1.12 17.57 64.73
AIB 2017 2.377 1 13.551 5 0.518 27.942 6 1 9.533
22.97 0.82 21.04 64.80
AIB 2018 2.700 6 11.753 2 0.499 56.836 7 2 9.625
25.24 0.86 15.23 64.73
AIB 2019 3.260 0 12.915 9 0.503 63.012 5 1 9.742
24.42 1.68 26.20 67.38
Anbessa 2015 3.426 0 14.031 7 0.425 107.800 5 8 9.768
25.05 1.95 18.65 67.82
Anbessa 2016 3.219 4 12.848 8 0.465 30.275 6 9 9.910
19.35 2.52 20.34 63.52 10.04
Anbessa 2017 2.449 5 12.651 4 0.582 2.644 3 9 0
21.60 2.53 21.08 63.85 10.15
Anbessa 2018 2.729 2 12.632 9 0.535 45.560 1 9 6
21.05 1.98 17.69 63.52 10.23
Anbessa 2019 2.643 9 12.552 1 0.525 37.943 7 9 5
14.38 1.40 29.79 65.27 10.40
BiB 2015 2.506 5 17.421 5 0.538 17.090 9 0 2
24.92 1.53 21.59 70.79 10.49
BiB 2016 3.610 2 14.486 4 0.463 148.871 6 0 3
17.27 1.46 22.78 60.60 10.62
BiB 2017 3.011 4 17.431 8 0.515 21.906 1 5 3

68
 14.89 1.45 19.34 62.49 10.74
BiB 2018 2.330 1 15.650 4 0.626 3.359 1 5 2
16.37 1.18 16.31 60.60 10.87
BiB 2019 2.388 8 14.583 3 0.620 39.677 9 5 3
15.89 1.53 21.10 56.54
BOA 2015 2.106 6 13.247 0 0.553 6.310 6 9 9.620
17.64 1.37 18.44 58.76
BOA 2016 2.227 2 12.624 0 0.571 30.220 4 7 9.857
18.40 1.27 13.58 56.97 10.02
BOA 2017 2.111 8 11.470 9 0.604 42.678 4 9 1
13.25 1.18 14.04 61.19 10.14
BOA 2018 1.760 7 13.274 1 0.635 5.250 4 0 8
15.69 1.34 11.38 56.97 10.28
BOA 2019 1.977 6 12.598 0 0.611 38.062 1 9 3
19.84 1.15 18.21 70.83
Bunna 2015 2.989 6 15.061 9 0.536 68.000 2 1 9.653
20.10 2.49 18.34 64.51
Bunna 2016 2.739 0 13.625 4 0.553 39.065 4 9 9.834
17.43 1.15 20.96 65.69
Bunna 2017 2.407 7 13.801 6 0.564 26.617 2 3 9.993
15.89 1.47 20.50 62.28 10.11
Bunna 2018 2.421 5 15.232 2 0.555 33.116 4 8 5
17.96 1.61 15.76 65.69 10.16
Bunna 2019 3.183 0 17.723 8 0.534 46.344 3 3 1
22.14 2.36 20.26 80.40 10.05
CBO 2015 2.726 4 12.309 7 0.565 -9.100 7 6 9
5.83 20.81 72.21 10.02
CBO 2016 0.372 3.832 9.701 9 0.957 -87.480 3 1 9
23.37 4.46 19.62 63.20 10.24
CBO 2017 1.904 5 8.143 6 0.661 764.556 7 7 9
22.03 2.43 25.68 66.46 10.47
CBO 2018 1.751 2 7.949 6 0.653 54.772 5 7 5
19.99 3.52 17.15 63.20 10.62
CBO 2019 1.574 5 7.871 6 0.710 25.667 6 7 1
24.93 1.59 22.33 52.81 10.39
DB 2015 2.944 7 11.807 8 0.746 2.330 1 6 4
16.03 1.87 22.96 51.31 10.45
DB 2016 2.430 3 15.158 1 0.564 -0.286 7 4 6
15.57 1.87 14.59 55.17 10.53
DB 2017 2.263 8 14.529 4 0.765 12.072 6 3 9
15.83 0.98 15.50 55.82 10.65
DB 2018 2.045 5 12.915 9 0.570 14.008 0 6 7
14.85 0.64 10.83 55.17 10.75
DB 2019 1.809 0 12.179 9 0.605 9.454 3 3 0
1.19 40.68 56.47
DGB 2015 1.504 7.857 19.141 2 0.475 22.000 3 5 9.058
16.66 1.44 19.19 70.01
DGB 2016 3.973 7 23.835 5 0.516 200.574 4 9 9.111
2.16 33.06 55.20
DGB 2017 1.461 7.829 18.658 9 0.547 -41.629 4 3 9.315

69
 15.63 1.74 25.29 62.39
DGB 2018 3.270 6 20.915 6 0.595 253.409 8 6 9.513
21.19 2.10 28.84 55.20
DGB 2019 3.840 3 18.118 3 0.627 97.606 3 3 9.739
11.94 1.04 24.22 49.66
Enat 2015 2.404 4 20.126 3 0.520 84.580 4 6 9.344
12.32 0.27 21.65 43.47
Enat 2016 2.420 8 19.630 2 0.515 48.695 3 6 9.512
11.14 0.63 22.52 34.92
Enat 2017 2.047 4 18.366 3 0.570 26.353 0 7 9.686
13.38 0.62 20.17 36.24
Enat 2018 2.451 6 18.310 3 0.501 59.208 3 6 9.812
13.13 0.77 18.41 34.92
Enat 2019 2.191 4 16.684 3 0.530 26.904 7 7 9.964
15.48 1.52 13.56 66.31 10.12
Nib 2015 2.543 1 16.425 5 0.515 7.000 1 1 2
14.16 1.79 18.81 65.61 10.19
Nib 2016 2.253 5 15.906 9 0.558 5.817 2 9 9
17.48 1.65 15.61 57.48 10.32
Nib 2017 2.457 2 14.054 3 0.519 44.792 4 2 3
15.23 1.52 14.55 57.75 10.42
Nib 2018 1.929 1 12.666 1 0.578 -0.308 7 2 6
16.34 0.98 11.65 57.48 10.52
Nib 2019 2.138 0 13.082 7 0.548 39.990 9 2 8
22.33 1.28 17.56 69.70
OIB 2015 2.326 8 10.414 8 0.576 43.700 6 9 9.979
19.05 2.35 19.17 68.98 10.05
OIB 2016 2.217 4 11.633 3 0.649 11.957 6 5 2
18.02 2.48 20.44 62.27 10.21
OIB 2017 1.833 0 10.172 9 0.645 19.844 6 3 2
28.08 1.59 24.41 63.90 10.37
OIB 2018 3.058 1 10.890 4 0.505 144.530 1 5 7
20.09 1.77 16.11 62.27 10.50
OIB 2019 2.347 0 11.682 7 0.553 2.494 4 3 2
16.68 1.23 18.96 60.79 10.15
UB 2015 1.959 3 11.742 8 0.611 1.100 4 1 7
16.68 1.00 16.83 57.10 10.23
UB 2016 1.955 8 11.718 5 0.603 20.509 6 2 7
15.65 0.81 14.47 53.24 10.34
UB 2017 1.766 3 11.280 2 0.633 14.622 9 5 3
19.42 1.31 16.14 54.65 10.44
UB 2018 2.046 0 10.538 8 0.595 47.621 9 4 8
19.49 0.54 10.71 53.24 10.55
UB 2019 2.105 2 10.800 1 0.576 31.148 7 5 3
Wogage 14.59 1.60 17.84 65.88 10.13
n 2015 2.570 8 17.609 7 0.551 9.400 4 8 7
Wogage 14.02 2.22 19.16 66.55 10.20
n 2016 2.324 7 16.569 4 0.583 6.575 6 2 9
Wogage 16.56 1.99 18.68 59.22 10.32
n 2017 2.483 7 15.371 7 0.562 38.116 4 8 1

70
Wogage 20.73 1.77 14.78 64.45 10.43
n 2018 2.897 8 13.970 6 0.533 52.964 2 2 8
Wogage 14.46 2.20 14.38 59.22 10.47
n 2019 2.086 2 14.423 8 0.650 -21.749 0 8 4
20.09 5.85 51.53 47.93
ZB 2015 3.153 4 15.691 5 0.450 19.700 3 4 9.688
19.57 4.48 29.64 43.67
ZB 2016 2.722 2 13.905 3 0.456 31.934 5 9 9.868
19.70 4.90 32.58 47.66
ZB 2017 2.727 5 13.837 0 0.409 31.194 1 3 9.985
15.97 4.45 32.59 37.99 10.09
ZB 2018 2.179 3 13.641 5 0.486 1.881 2 4 5
20.73 2.21 17.20 47.66
ZB 2019 3.293 6 15.880 1 0.396 78.499 3 3 9.167

71