Evaluating the Performance of Saudi Commercial Banks Using CAMELS Methodology

Mohammad Nadem Dabaghie, Khaled Subhi Rajha


This study aims to evaluate the Saudi commercial banks performance using CAMELS methodology with a sample of 12 Saudi commercial banks listed on the Saudi Stock Exchange during the period 2010-2016.The study measures the performance by calculating the rate of return on assets, while the independent variables included elements of the CAMELS model, in addition to the rate of growth, inflation and the bank size.The study results show that capital adequacy, asset quality, management efficiency, and profitability have a statistically significant positive impact on the performance of Saudi commercial banks. Liquidity and market risk sensitivity were a significant negative impact on the performance of Saudi commercial banks. As well, growth and volume had a positive and statistically significant impact while inflation had a negative and statistically significant impact on the banks performance. The study recommends increasing attention to the preparation of training courses in the evaluation of banks using the CAMELS model in order to develop regulatory systems. The study also recommends that SAMA should make more efforts to reduce non-performing loans

Keywords: Return on Assets, Inflation, Growth, CAMELS Model.

DOI: 10.7176/RJFA/10-12-12

Publication date:June 30th 2019

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ISSN (Paper)2222-1697 ISSN (Online)2222-2847

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