Main Article Content
Abstract
Purpose: This research analyzed about profitability banks performance based on the CAMEL (Capital Adequacy, Asset Quality, Management, Earnings and Liquidity) on the Bank's profitability. Capital adequacy measured by debt equity ratio (DER) and non-performing loans (NPL), asset quality measured by return on assets (ROA), management will be measured by cost per income, earnings measured by return on equity (ROE) and liquidity measured by interest expense and deposit.
Methodology: The samples were 114 samples (from 10 bank in Malaysia and 9 bank in Indonesia) since 2010-2015. This analysis used descriptive method and multiple regression analysis, the result of this research indicated that banking profitability have a good performance based on CAMEL analysis.
Findings: From the results of regression, the CAMEL analysis has a significant relationship to the bank profitability
Practical Implications: The study demonstrated the use of CAMEL analysis to measure bank profitability. If bank performance declining through the CAMEL analysis so the Bank should make a decision to make a better performance changes of banking.
Social Implications: This study was about the importance of camel analysis measuring the performance banking. CAMEL analysis detected the decrease in performance in any business sector.
Originality/Value: This analysis adapted and adopted the study conducted by Sahut and Mili(2011), but this study focusedonly on the comparative performance between conventional and Islamic banking between Malaysia and Indonesia.
Research Limitations/Implications: Comparison of CAMEL analysis focused on two countries between Malaysia and Indonesia (it also involves the comparative analysis of conventional and Islamic bank) to gain the profitabilityof banking, ROI with short period since 2010 until 2015
Keywords
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References
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- Kabajeh, M. A. M., Nu’Aimat, S. M. A. Al, and Dahmash, F. N. (2012), “The Relationship between the ROA , ROE and ROI Ratios with Jordanian Insurance Public Companies Market Share Prices,â€International Journal of Humanities and Social Science, 2(11), 115–120.
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References
Ali, A. Y. (1987), “The Holy Quran ( Koran),†(W. B. Brown, Ed.) (Presidency). King Fahd Holy Quran Printing Complex.
Altman, Edward I. (2000), “Predicting Financial Distress of Companies: Revisiting the Z-Score and ZETA® Models,†5(July):1–54
Becerra, M. (2009),“Theory of the Firm for Strategic Management: Economic Value Analysis,†(First Publ). New York: Cambridge University Press, https://doi.org/10.1017/cbo9780511626524 DOI: https://doi.org/10.1017/CBO9780511626524
Betz, F., Oprică, S., Peltonen, T. A., and Sarlin, P. (2013),“Predicting Distress in European Banks,†(No. NO 1597 / OCTOBER 2013). Working Paper Series. Frankufurt am Main, Germany.
Bonaccorsi di Patti, E., and Kashyap, A. K. (2009),“Which Banks Recover from a Banking Crisis?,†1–44.
Ghozali, Imam. (2009), “Aplikasi Analysis Multivariate dengan Program SPSS,†Badan Penerbit Universitas Diponegoro.
Hays, F. H., De Lurigo, S. A., and Gilbert, A. H. (2009),“Efficiency Ratios and Community Bank Performance,â€Journal of Finance and Accountancy, 1–15.
Ito, T., and Hashimoto, Y. (2007), “Bank Restructuring in Asia : Crisis Management in the Aftermath of the Asian Financial Crisis and Prospects for Crisis Prevention, Malaysia,â€(RIETI Discussion Paper Series 07-E-039). RIETI Discussion Paper. Tokyo, Japan.
Jan, A., and Marimuthu, M. (2015), “Bankruptcy and Sustainability : A Conceptual Review on Islamic Banking Industry,â€Global Business and Management Research:An International Journal, 7(1), 109–138.
Jarmila, A. G., Monea, M., and Slusariuc, C. G. (2011),“Particularities of Budgeting of Investments Yield,†Annals of the University of Petrosani, 11(2), 119–126.
Kabajeh, M. A. M., Nu’Aimat, S. M. A. Al, and Dahmash, F. N. (2012), “The Relationship between the ROA , ROE and ROI Ratios with Jordanian Insurance Public Companies Market Share Prices,â€International Journal of Humanities and Social Science, 2(11), 115–120.
Kothari, C. (2004),“Research Methodology: Methods and Techniques,†New Age International Publishers.
Pangestu, M., & Habir, M. (2002). The Boom, Bust, and Restructuirng of Indonesian Banks (Regional Office for Asia and the pPcific No. WP/02/66). DOI: https://doi.org/10.5089/9781451848809.001
Salem, R. A. (2013), “Risk Management for Islamic Banks,†In Edinburgh Guides to Islamic Finance (p. 66). Edinburgh University Press.
Song, I., and Oosthuizen, C. (2014), “Islamic Banking Regulation and Supervision: Survey Results and Challenges,†International Monetary Fund Working PaperNo. WP/14/220. International Monetary Fund: Monetary and Capital Markets Department Islamic.
Worrell, D. (2004), “Quantitative Assessment of the Financial Sector : An Integrated Approach,†International Monetary Fund Working Paper: Monetary Financial Systems Department. 1–26.