Factors affecting on the profitability of commercial banks using the CAMELS model An Applied Study on the Algerian commercial banks during the period 2005-2014

Abstract

This study aims at identifying the effect of CAMELS factors on the profitability of Algerian commercial banks by examining the components of the CAMELS model: Capital adequacy ratio; Asset quality ratio; Management quality ratio; Earnings quality ratio; Liquidity quality ratio; sensitivity to market risk ratio on the profitability indicators (Return on equity and Return on assets ). The study is based on a sample of Algerian commercial banks during the period 2005-2014. Using the Panel data models, the main results of the applied study indicate that the Capital adequacy ratio, Asset quality ratio and Management quality ratio, are considered explanatory factors for the profitability of Algerian commercial banks.