The Safety of Banks in Vietnam Using CAMEL

Title

Authors

Do Thi Thanh Nhan
(Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City, Vietnam)
Kim-Hung Pho
(Faculty of Mathematics and Statistics, Ton Duc Thang University, Ho Chi Minh City, Vietnam)
Dang Thi Van Anh
(Department of Finance, Feng Chia University, Taichung City, Taiwan)
Michael McAleer
(Department of Finance, College of Management, Department of Bioinformatics and Medical Engineering, College of Information and Electrical Engineering, Asia University, Taiwan)

Abstract

A key, important, and popular set of criteria to evaluate the safety, stability, and sustainability of banks is the CAMEL method. The CAMEL system is an abbreviation for indicators that consists of a ranking system for a bank, and includes 5 chief ingredients, namely Capital Adequacy, Asset Quality, Management Quality, Earnings, and Liquidity. Banks need to comply with the CAMEL system in order to facilitate the bank to operate sustainably, safely, and grow larger and stronger. The primary interest in the paper is to analyze the safety, stability, and sustainability of banks in Vietnam. Based on financial statements, data are collected from banks in Vietnam from 2014 to 2017, and the CAMEL method is used to investigate the safety, profitability, liquidity, and risk management of these banks. The data were collected and stored according to banking regulations in Vietnam that have changed over time.

Keywords

CAMEL method, Analyze, Vietnam, Banks.

Classification-JEL

F38, G21, G24, G33, O16.

Pages

158-192

https://doi.org/10.47654/v25y2021i2p158-192