ISSN: 2225-8329
Open access
The research investigated the impact of CAMEL variables on the share prices of listed Nigerian commercial banks. The study used the Ordinary Least Squares (OLS), Random-Effects Model (REM), and Fixed-Effect Model (FEM) to examine the effects of capital adequacy, earnings, asset quality, managerial efficiency, and liquidity on the share prices of twelve commercial banks listed in Nigeria from 2011 to 2020. The Hausman test showed that the fixed effect model is preferable to the random effect model. The study found no correlation between capital adequacy, earnings, asset quality, and the commercial banks' share prices. In addition, managerial ability and liquidity had a significantly negative effect on the share prices of the studied commercial banks. The paper recommended that the Central Bank of Nigeria (CBN) undertake its on-site assessment function more regularly to better monitor and identify irresponsible and immoral behaviour that erodes capital, liquidity, and asset quality early so remedial actions may be adopted as soon as feasible.
Abiola, I., & Olausi, A. S. (2014). The impact of credit risk management on the commercial banks performance in Nigeria. International Journal of Management and Sustainability, 3(5), 295–306.
Adesina, K. S. (2012). A Comparative Performance Evaluation of the Nigerian Banking Sector in the post-2005 Consolidation: Through the Camel Rating System. International Journal of Business and Social Science, 3(13), 259–268.
Adeyemi, K. S. (2006). Banking sector consolidation in Nigeria: Issues and challenges. Union Digest, 9(3), 123–144.
Akinbo-Balogun, E.-O. (2022). Evaluating the impact of credit risk management on the financial performance of commercial banks in Nigeria. Neapolis University.
Al Zaidanin, J. (2020). A Study on financial performance of the Jordanian commercial banks using the CAMEL model and panel data approach. International Journal of Finance & Banking Studies, 9(4), 111–130.
Aliyu, A., & Hassan, S. U. (2020). Bank attributes and financial performance of listed deposit money banks in Nigeria the moderating role of information technology. International Journal of Auditing and Accounting Studies, 2(1), 67–94.
Altan, M., Yusufazari, H., & Beduk, A. (2014). Performance analysis of banks in Turkey using CAMEL approach. Proceedings of International Academic Conferences, 2, 21–32.
Babu, M. R., & Kumar, M. A. (2017). Adequacy of camels rating system in measuring the efficiency of banking industry: a retrospect. International Journal of Research in Arts and Sciences, 3(3–8), 3–6.
Bahrami, N. (2013). The effect of banks rating by CAMEL indicators on bank stock return. Azad University.
Balasundaram, N. (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.
Boateng, K. (2019). Credit risk management and performance of banks in Ghana: The 'Camels' rating model approach. International Journal of Business and Management Invention, 8(02), 41–48.
Chaudhuri, B. (2018). A Comparative analysis of SBI and ICICI: Camel Approach. International Journal of Research in Management, Economics and Commerce, 8(1), 151–156.
Cooper, D., & Schindler, P. (2014). Business research methods (12th ed.). McGraw-Hill Education.
Ebrahimi, S. K., Bahraminasab, A., & Fard, M. Y. (2017). Performance assessment of banks listed on Tehran Stock Exchange based on CAMEL indicators. International Journal of Economics and Financial Issues, 7(5), 128.
Echekoba, F., Egbunike, C., & Ezu, G. (2014). Determinants of bank profitability in Nigeria: Using Camel rating model (2001–2010). IOSR Journal of Business and Management, 16(9), 44–50.
Ferrouhi, E. M. (2014). Moroccan Banks analysis using camel model. International Journal of Economics and Financial Issues, 4(3), 622–627.
Gwamna, Y. J., Miko, N. U., & Abdullahi, M. (2022). Risk and financial performance of listed deposit money banks in Nigeria. Polac International Journal Of Economics And Management Science (Pijems), 8(1), 2465–7085.
Iheanyi, I., & Sotonye, I. (2017). Assessing the performance of Nigeria's bank through Camel model. Journal of Accounting and Financial Management, 3(1), 14–22.
Javaheri, M. (2014). Investigation of the effect of Bank Privatization on CAMEL indicator. University of Semnan.
Lopez, J. A. (1999). Using CAMELS ratings to monitor bank conditions. FRBSF Economic Letter.
Lucky, A., & Akani, H. (2017). Comparative analysis of commercial banks soundness: A CAMELS study of Nigerian pre and post-consolidation era. Research Journal on Finance and Accounting, 8(20), 149–173.
Maude, F. (2021). Moderating Effect of Industry Concentration on the Effect of Camels Financial Indicators on Financial Performance of Deposit Money Banks in Nigeria. Ahmadu Bello University, Zaria.
Maude, F. A., & Dogarawa, A. B. (2016). A Critical review of empirical studies on assessing bank performance using CAMEL framework. Nigerian Journal of Management Technology and Development, A Publication of Faculty of Management Technology, Abubakar Tafawa Balewa University, Bauchi, 7(2), 21–32.
Maude, F., Tijjani, M., Muazu, S., Ringim, K., & Dogarawa, B. (2020). Effect of CAMELS financial indicators on profitability of systemically important banks (SIBs) in Nigeria. Ournal of Management Studies, Usmanu Danfodiyo University, Sokoto, Nigeria, 1–21.
Nandar, L. (2019). Analysing financial performance of selected banks in Myanmar (CAMEL approach). Co-Operative University, Sagaing.
Nugroho, M., Halik, A., & Arif, D. (2020). Effect Of Camels Ratio On Indonesia Banking Share Prices. The Journal of Asian Finance, Economics and Business, 7(11), 101–106.
Ogujiuba, K., & Obiechina, M. E. (2011). Financial sector reforms in Nigeria: Issues and challenges. International Journal of Business and Management, 6(6), 222.
Olunuga, O., & Akinrodoye, O. (2022). Financial management practices and performance of deposit money banks in emerging market. Economic Insights-Trends & Challenges, XI(LXXIV)(1), 67–75.
Onodi, B. E., Egolum, P., & Onuche, S.-J. E. (2021). Banking reforms and operational performance of commercial banks in Nigeria. International Journal of Economics, Business and Management Research, 5(7), 50--66.
Ping, K. G., & Kusairi, S. (2020). Analysis of CAMEL components and commercial bank performance: panel data analysis. Jurnal Organisasi Dan Manajemen, 16(1), 1–10.
Sathyamoorthi, C., Mapharing, M., Ndzinge, S., Tobedza, G., & Wally-Dima, L. (2017). Performance evaluation of listed commercial banks in Botswana: The Camel model. Archives of Business Research, 5(10), 143–159.
Soyemi, K. A., Ogunleye, J. O., & Ashogbon, F. O. (2014). Risk management practices and financial performance: evidence from the Nigerian deposit money banks (DMBs). The Business & Management Review, 4(4), 345–354.
Tabatabaei, M. (2011). Comparison between financial performance of Shahr bank and Other banks using CAMEL model. University of Tehran.
Thisaranga, K., & Ariyasena, D. (2021). Effect of CAMEL model on bank performance: with special reference to listed commercial banks in Sri Lanka. International Conference on Business Research, University OfMoratuwa, Sri Lanka, 188–213.
Wapmuk, S. E. (2016). Banking regulation and supervision in Nigeria: an analysis of the effects of banking reforms on bank performance and financial stability. University of Salford.
Yusuf, B. R., & Tijani, J. O. (2019). An evaluation of financial health of Nigerian deposit money banks using CAMELS rating model. Economics and Applied Informatics, 25(1), 48–61.
Abiola, I., & Olausi, A. S. (2014). The impact of credit risk management on the commercial banks performance in Nigeria. International Journal of Management and Sustainability, 3(5), 295–306.
Adesina, K. S. (2012). A Comparative Performance Evaluation of the Nigerian Banking Sector in the post-2005 Consolidation: Through the Camel Rating System. International Journal of Business and Social Science, 3(13), 259–268.
Adeyemi, K. S. (2006). Banking sector consolidation in Nigeria: Issues and challenges. Union Digest, 9(3), 123–144.
Akinbo-Balogun, E.-O. (2022). Evaluating the impact of credit risk management on the financial performance of commercial banks in Nigeria. Neapolis University.
Al Zaidanin, J. (2020). A Study on financial performance of the Jordanian commercial banks using the CAMEL model and panel data approach. International Journal of Finance & Banking Studies, 9(4), 111–130.
Aliyu, A., & Hassan, S. U. (2020). Bank attributes and financial performance of listed deposit money banks in Nigeria the moderating role of information technology. International Journal of Auditing and Accounting Studies, 2(1), 67–94.
Altan, M., Yusufazari, H., & Bedük, A. (2014). Performance analysis of banks in Turkey using CAMEL approach. Proceedings of International Academic Conferences, 2, 21–32.
Babu, M. R., & Kumar, M. A. (2017). Adequacy of camels rating system in measuring the efficiency of banking industry: a retrospect. International Journal of Research in Arts and Sciences, 3(3–8), 3–6.
Bahrami, N. (2013). The effect of banks rating by CAMEL indicators on bank stock return. Azad University.
Balasundaram, N. (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.
Boateng, K. (2019). Credit risk management and performance of banks in Ghana: The 'Camels’ rating model approach. International Journal of Business and Management Invention, 8(02), 41–48.
Chaudhuri, B. (2018). A Comparative analysis of SBI and ICICI: Camel Approach. International Journal of Research in Management, Economics and Commerce, 8(1), 151–156.
Cooper, D., & Schindler, P. (2014). Business research methods (12th ed.). McGraw-Hill Education.
Ebrahimi, S. K., Bahraminasab, A., & Fard, M. Y. (2017). Performance assessment of banks listed on Tehran Stock Exchange based on CAMEL indicators. International Journal of Economics and Financial Issues, 7(5), 128.
Echekoba, F., Egbunike, C., & Ezu, G. (2014). Determinants of bank profitability in Nigeria: Using Camel rating model (2001–2010). IOSR Journal of Business and Management, 16(9), 44–50.
Ferrouhi, E. M. (2014). Moroccan Banks analysis using camel model. International Journal of Economics and Financial Issues, 4(3), 622–627.
Gwamna, Y. J., Miko, N. U., & Abdullahi, M. (2022). Risk and financial performance of listed deposit money banks in Nigeria. Polac International Journal Of Economics And Management Science (Pijems), 8(1), 2465–7085.
Iheanyi, I., & Sotonye, I. (2017). Assessing the performance of Nigeria’s bank through Camel model. Journal of Accounting and Financial Management, 3(1), 14–22.
Javaheri, M. (2014). Investigation of the effect of Bank Privatization on CAMEL indicator. University of Semnan.
Lopez, J. A. (1999). Using CAMELS ratings to monitor bank conditions. FRBSF Economic Letter.
Lucky, A., & Akani, H. (2017). Comparative analysis of commercial banks soundness: A CAMELS study of Nigerian pre and post-consolidation era. Research Journal on Finance and Accounting, 8(20), 149–173.
Maude, F. (2021). Moderating Effect of Industry Concentration on the Effect of Camels Financial Indicators on Financial Performance of Deposit Money Banks in Nigeria. Ahmadu Bello University, Zaria.
Maude, F. A., & Dogarawa, A. B. (2016). A Critical review of empirical studies on assessing bank performance using CAMEL framework. Nigerian Journal of Management Technology and Development, A Publication of Faculty of Management Technology, Abubakar Tafawa Balewa University, Bauchi, 7(2), 21–32.
Maude, F., Tijjani, M., Muazu, S., Ringim, K., & Dogarawa, B. (2020). Effect of CAMELS financial indicators on profitability of systemically important banks (SIBs) in Nigeria. Ournal of Management Studies, Usmanu Danfodiyo University, Sokoto, Nigeria, 1–21.
Nandar, L. (2019). Analysing financial performance of selected banks in Myanmar (CAMEL approach). Co-Operative University, Sagaing.
Nugroho, M., Halik, A., & Arif, D. (2020). Effect Of Camels Ratio On Indonesia Banking Share Prices. The Journal of Asian Finance, Economics and Business, 7(11), 101–106.
Ogujiuba, K., & Obiechina, M. E. (2011). Financial sector reforms in Nigeria: Issues and challenges. International Journal of Business and Management, 6(6), 222.
Olunuga, O., & Akinrodoye, O. (2022). Financial management practices and performance of deposit money banks in emerging market. Economic Insights-Trends & Challenges, XI(LXXIV)(1), 67–75.
Onodi, B. E., Egolum, P., & Onuche, S.-J. E. (2021). Banking reforms and operational performance of commercial banks in Nigeria. International Journal of Economics, Business and Management Research, 5(7), 50--66.
Ping, K. G., & Kusairi, S. (2020). Analysis of CAMEL components and commercial bank performance: panel data analysis. Jurnal Organisasi Dan Manajemen, 16(1), 1–10.
Sathyamoorthi, C., Mapharing, M., Ndzinge, S., Tobedza, G., & Wally-Dima, L. (2017). Performance evaluation of listed commercial banks in Botswana: The Camel model. Archives of Business Research, 5(10), 143–159.
Soyemi, K. A., Ogunleye, J. O., & Ashogbon, F. O. (2014). Risk management practices and financial performance: evidence from the Nigerian deposit money banks (DMBs). The Business & Management Review, 4(4), 345–354.
Tabatabaei, M. (2011). Comparison between financial performance of Shahr bank and Other banks using CAMEL model. University of Tehran.
Thisaranga, K., & Ariyasena, D. (2021). Effect of CAMEL model on bank performance: with special reference to listed commercial banks in Sri Lanka. International Conference on Business Research, University OfMoratuwa, Sri Lanka, 188–213.
Wapmuk, S. E. (2016). Banking regulation and supervision in Nigeria: an analysis of the effects of banking reforms on bank performance and financial stability. University of Salford.
Yusuf, B. R., & Tijani, J. O. (2019). An evaluation of financial health of Nigerian deposit money banks using CAMELS rating model. Economics and Applied Informatics, 25(1), 48–61.
In-Text Citation: (Ikechukwu & Owualah, 2022)
To Cite this Article: Ikechukwu, O. H., & Owualah, S. I. (2022). Evaluating the Impact of Camel Variables on the Share Price of Banks in Nigeria. International Journal of Academic Research in Accounting Finance and Management Sciences, 12(3), 295–308.
Copyright: © 2022 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
2025 © Copyright HRMARS. All rights Reserved.