2016-17

Banking and Financial Services

Assignment I

Group 5
Rohit Chawla

15A2HP448

Siddharth Jain

15A1HP104

Sukhdeep Singh 15A1HP106

Given
Given was the data for a total of 27 Scheduled Commercial banks (Table 1) for 2013 and 2014.
The data consisted of Balance Sheet, Income Statement, Key Ratios and Amount of NPAs.
Assignment
Calculate the CAMEL ratios of Banks followed by the group score and composite score and
find out the rankings of the given banks.

Table 1: List of Banks

Allahabad Bank

Punjab And Sind Bank

Andhra Bank

Punjab National Bank

Bank Of Baroda

State Bank Of Bikaner & Jaipur

Bank Of India

State Bank Of Hyderabad

Bank Of Maharashtra

State Bank Of India

Bhartiya Mahila Bank Ltd.

State Bank Of Mysore

Canara Bank

State Bank Of Patiala

Central Bank Of India

State Bank Of Travancore

Corporation Bank

Syndicate Bank

Dena Bank

Uco Bank

IDBI Bank Limited

Union Bank Of India

Indian Bank

United Bank Of India

Indian Overseas Bank

Vijaya Bank

Oriental Bank Of Commerce

Solution
Various ratios were considered in assessing the relative performance of the banks (Working).
These are Capital, Asset Quality, Management, Earnings and Liquidity and are seen to reflect
the financial performance, financial condition, operating soundness and regulatory compliance of
the banking institution.
Upper Limit and Lower Limit were assigned to the ratios. Individual Ratios Weights and
Composite Ratio Weight were given. Group Score was calculated with the help of the following
formula:Group Score (csj) = wi (R LL / UL LL)

Page | 1

(csj)

Component score of each category in CAMEL

wi

Weights assigned to (i)th ratio in each component of CAMEL

value of the ratio considered

After the Group Score, Composite Score was calculated and based on the Composite Score;
ranking to the Banks was given. The Bank with highest Composite Score was ranked one and
subsequently all other banks were ranked.
Analysis
In CAMEL parameters Asset quality and Earnings quality are considered very important because
assets size indicates growth of the bank and earnings efficiency ensures survival of the bank.
Next important categories are Capital adequacy which ensures safety of depositors and
Management quality which indicates productivity of the banks. Though liquidity is essential, it is
given least weight as high liquidity deteriorates profitability of the banks and affects the overall
performance of the banks.
During the year 2013, the top three performing banks in all the categories of CAMEL are IDBI
Bank, State Bank of Hyderabad, Punjab National Bank and the worst three performers are
Andhra Bank, Central Bank of India and Vijaya Bank.
Table 2: Comparison of Composite Score and Ranking
S.
No.
1

Bank Name

Composite
Score

Rank
2013

Composite
Score

Rank 2014

ALLAHABAD BANK

0.3541

23

0.3258

15

ANDHRA BANK

0.3328

26

0.3309

13

BANK OF BARODA

0.4993

0.3327

12

BANK OF INDIA

0.3755

21

0.3438

10

BANK OF MAHARASHTRA

0.3850

20

0.3281

14

CANARA BANK

0.4164

14

0.3232

16

CENTRAL BANK OF INDIA

0.3445

25

0.2665

23

CORPORATION BANK

0.4516

0.3054

21

DENA BANK

0.3955

18

0.3141

20

10

IDBI BANK LIMITED

0.5520

0.3567

11

INDIAN BANK

0.4777

0.3491

12

INDIAN OVERSEAS BANK

ORIENTAL BANK OF
COMMERCE

0.4127

15

0.3181

19

0.4350

12

0.3466

13

Page | 2

14

PUNJAB AND SIND BANK

0.4032

17

0.2658

24

15

0.5150

0.3664

0.4781

0.3839

0.5197

0.3636

18

PUNJAB NATIONAL BANK

STATE BANK OF BIKANER &
JAIPUR
STATE BANK OF
HYDERABAD
STATE BANK OF INDIA

0.5064

0.3669

19

STATE BANK OF MYSORE

0.4396

11

0.3346

11

20

0.3878

19

0.3194

18

0.4067

16

0.2921

22

22

STATE BANK OF PATIALA

STATE BANK OF
TRAVANCORE
SYNDICATE BANK

0.4803

0.3471

23

UCO BANK

0.4496

10

0.3654

24

UNION BANK OF INDIA

0.4283

13

0.3213

17

25

UNITED BANK OF INDIA

0.3672

22

0.2271

26

26

VIJAYA BANK

0.3472

24

0.2563

25

27

BHARTIYA MAHILA BANK**

0.5520

16
17

21

**Note Although Bhartiya Mahila Bank is ranked number 1 in 2014 but since there was
no data available for the bank in 2013, the comparison was not possible. Hence, all the
subsequent banks after BMB have been considered for ranking.
Banks having top 3 positions in either of the two years (2013 or 2014).
2013 Ranking of Top 3 Banks
2014 Ranking Top 3 Banks
From year 2013 to 2014, State Bank of Bikaner & Jaipur improved its position from 7th rank to
1st rank, and State Bank of India from 4th rank to 2nd rank and IDBI Bank deteriorated from 1st
rank to 6th rank. State Bank of Hyderabad fell to 5th rank from 2nd and Punjab National Bank has
still maintained its 3rd rank. There are few banks that have drastically improved or declined like
Allahabad Bank, Andhra Bank, Bank of Baroda, and Corporation bank etc. (if the change in the
ranks is in the range of -5 to 5, it assumed that there is no significant change in the performance
of the banks)
During the period 2013-14 out of 26 Banks (excluding Bhartiya Mahila Bank), 11 Banks have
improved and 13 have deteriorated from their positions and 2 Banks retained their positions.

Page | 3

Conclusion
CAMEL approach is significant tool to assess the relative financial strength of a bank and to
suggest necessary measures to improve weaknesses of a bank. In the present study, modified
version of CAMEL ranking approach is used to assess relative positions of commercial banks.
It is found that during the year 2014 the top three performing banks in all the categories of
CAMEL are State Bank of Bikaner and Jaipur, State Bank of India and Punjab National
Bank because of high earnings quality and liquidity. The worst three performers are United
Bank of India, Vijaya Bank and Punjab and Sind Bank because of low capital adequacy, low
assets and earnings quality and poor management quality.

Page | 4