Open AccessSoundness of Ethiopian Banks
Author(s) -
Hamdu Kedir Mohammed,
Yonas Mekonnen Wetere,
mikeal Shibru Bekelecha
Publication year - 2015
Publication title -
international journal of finance and banking studies
Language(s) - English
Resource type - Journals
ISSN - 2147-4486
DOI - 10.20525/ijfbs.v4i2.218
Subject(s) - financial institution , governor , settlement (finance) , audit , institution , soundness , accounting , poverty , banking industry , business , finance , economics , engineering , economic growth , computer science , political science , law , payment , programming language , aerospace engineering
A well-functioning financial institution will sustain a countries economic development and play a great role in reduction of poverty. One of the major participants in the financial institution is the banking industry. However, the mal-functioning of the banking system can be extremely costly to the real economy. As Bank is one of the participants and major key player in the financial institutions, it needs a continuous assessment by its supervisory and management. Mere ratio analyses are commonly used Performance measurement among the banking industry in Ethiopia. Nonetheless, these financial ratios are more of traditional as well as partial measurements. As such this study conducted using CAMEL framework set by bank for international settlement. The study takes secondary data which are gathered from audited annual reports of all banks. The result shows CAMEL framework is the best fit measurement for Ethiopian Banks and it give a comprehensive result which is very helpful for the governor to set a well determined policy and procedure.