Financial Performance of Listed Commercial Banks in Tanzania: A Camel Model Approach
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Date
2022-03-16
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African Journal of Applied Research
Abstract
Purpose: The study focused on analysing the financial performance of seven listed commercial
banks at the Dar es Salaam Stock of exchange (DSE) for five years from 2016 to 2020. CAMEL
model was utilised to fully assess the financial strength of these listed banks. CAMEL is an
acronym that stands for capital adequacy, asset quality, management efficiency, earning quality
and liquidity
Design/Methodology/Approach: Explanatory research design was applied fully to establish the
cause and effect relationship that exists between the response variable (banks performance) and
explanatory variables (capital adequacy, asset quality, management efficiency, earning quality and
liquidity) of commercial banks listed at DSE in Tanzania. Secondary data were sourced from
audited financial statements and annual reports. Pre regression analysis was done
(multicollinearity test and Durbin-Watson test). Last but not least correlation and linear regression
analysis were done.
Findings: The findings reveal that commercial banks listed at the DSE in Tanzania are mostly
affected by management efficiency and capital adequacy
Research Limitations/Implications: This study focused on using CAMEL analysis on only
seven listed commercial banks at DSE in Tanzania from 2016 up to 2020.
Practical implications: The study demonstrated the use of CAMEL analysis in measuring the
listed commercial banks' performance in Tanzania. Thus this model can be used as the benchmark
in deciding to yield better performance results for the listed commercial banks in Tanzania.
Originality/ Value: The study demonstrated the use of CAMEL analysis in measuring the listed
commercial banks' performance in Tanzania
Description
Keywords
Financial performance; CAMEL model; listed commercial banks; Tanzania