CAMEL(S) AND BANKS PERFORMANCE EVALUATION: THE WAY FORWARD.

BY

WIRNKAR A.D. AND TANKO M.

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Electronic copy available at: http://ssrn.com/abstract=1150968

ABSTRACT Despite the continuous use of financial ratios analysis on banks performance evaluation by banks regulators, opposition to it skill thrive with opponents coming up with new tools capable of flagging the over-all performance ( efficiency) of a bank. This research paper was carried out; to find the adequacy of CAMEL in capturing the overall performance of a bank; to find the relative weights of importance in all the factors in CAMEL; and lastly to inform on the best ratios to always adopt by banks regulators in evaluating banks efficiency. The data for the research work is secondary and was collected from the annual reports of eleven commercial banks in Nigeria over a period of nine years (1997 2005). The purposive sampling technique was used. The presentation of data was in tables and analyzed via the Efficiency Measurement System (EMS) 1.30 software of Holger School and independent T-test equation. The findings revealed the inability of each factor in CAMEL to capture the wholistic performance of a bank. Also revealed, was the relative weight of importance of the factors in CAMEL which resulted to a call for a change in the acronym of CAMEL to CLEAM. In addition, the best ratios in each of the factors in CAMEL were identified. For example, the best ratio for Capital Adequacy was found to be the ratio of total shareholders fund to total risk weighted assets. The paper concluded that no one factor in CAMEL suffices to depict the overall performance of a bank. Among other recommendations, banks regulators are called upon to revert to the best identified ratios in CAMEL when evaluating banks performance.

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Electronic copy available at: http://ssrn.com/abstract=1150968

Introduction

It is usual to measure the performance of banks using financial ratios. Often, a number of criteria such as profits, liquidity, asset quality, attitude towards risk, and management strategies must be considered. In the early 1970s, federal regulators in USA developed the CAMEL rating system to help structure the bank examination process. In 1979, the Uniform Financial Institutions Rating System was adopted to provide federal bank regulatory agencies with a framework for rating financial condition and performance of individual banks (Siems and Barr; 1998). Since then, the use of the CAMEL factors in evaluating a banks financial health has become widespread among regulators. Piyu (1992) notes currently, financial ratios are often used to measure the overall financial soundness of a bank and the quality of it management. Bank regulators, for example, use financial ratios to help evaluate a banks performance as part of the CAMEL system. The evaluation factors are as follows; C A M E L Capital adequacy Asset quality Management quality Earnings ability Liquidity.

Each of the five factors is scored from one to five, with one being the strongest rating. An overall composite CAMEL rating, also ranging from one to five, is then developed from this evaluation. As a whole, the CAMEL rating, which is determined after an on-site examination, provides a means to categorize banks based on their overall health, financial status, and management. The Commercial Bank Examination Manual produced by the Board of Governors of the Federal Reserve System in U.S describes the five composite rating levels as follows (Siems and Barr, 1998). CAMEL = 1 an institution that is basically sound in every respect.

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Electronic copy available at: http://ssrn.com/abstract=1150968

CAMEL

2 an institution that is fundamentally sound but has weaknesses.

modest

CAMEL

3 an institution with financial, operational, or compliance weaknesses that give cause for supervisory concern.

CAMEL

4 an institution with serious financial weaknesses that could impair future viability.

CAMEL

5 an institution with critical financial weaknesses that render the probability of failure extremely high in the near term.

In Nigeria, commercial banks are examined annually for safety and soundness by the Banking Supervision Department of the Central Bank of Nigeria (CBN).

Statement of the Problem

Banks performance or rather solvency or insolvency has been given much attention both at the local and international level. Financial ratios are often used to measure the overall financial soundness of a bank and the quality of its management. Banks regulators, for example, use financial ratios to help evaluate a banks performance as part of the CAMEL system (YUE, 1992).
Despite

continuous use of ratios analysis in banks performance appraisal by regulators, opponents to it still thrive. Financial ratios are somewhat limited in scope, that is, simple gap

analysis are one dimensional views of a service, product, or process that ignore any interactions, substitutions or trade-offs between key variables (Siems and Barr, 1998).

According to David A. and Vlad M. (2002), Studies on productivity growth in the banking sector usually base their analysis on cost ratio comparisons. There are several cost ratios to be used and each one of them refers to a particular aspect of bank activity. Since the banking industry uses multiple inputs to produce multiple

outputs, a consistent aggregation may be problematic. Some attempts have been made to estimate average practice cost functions. While these approaches were successful in identifying the average practice productivity growth, they failed to take into account the productivity of the best practice banks. These problems associated with the classical approach to productivity led to the emergence of other approaches which incorporate multiple inputs/outputs and take into account the relative performance of banks.

Hypotheses
HO1: There is no significant difference between banks efficiency and capital adequacy. HO2: There is no significant difference between banks efficiency and asset quality. HO3: There is no significant difference between banks efficiency and management quality. HO4: There is no significant difference between banks efficiency and earnings ability. HO5: There is no significant difference between banks efficiency and liquidity.

Literature Review Banks performance or rather solvency or insolvency has been given much attention both at the local and international level. Financial ratios are often used to measure the overall financial soundness of a bank and the quality of its management. Banks regulators, for example, use financial ratios to help evaluate a banks performance as part of the CAMEL system (YUE, 1992). Empirical evidence on the use of ratios for banks performance appraisal include; Beaver (1966), Altman (1968), Maishanu (2004), Mous (2005). Beaver (1966) was the first person to use financial ratios for predicting bankruptcy his study was limited to looking at only one ratio at a time. Altman (1968) changed this by using a multiple discriminant analysis (MDA). His analysis

combined the information from several financial ratios in a single prediction model. Altmans z- score model was the result of this multiple discriminant analysis and has been popular for a number of decades as it was easy to use and highly accurate. But there was critique on the MDA model. Altman treated businesses from different sectors as the same, ignoring the fact that there should be different values for a healthy indication by the financial ratios of the different kinds of businesses. Maishanu (2004) identified eight financial ratios that could serve in informing financial analysts on the financial state of a bank. As such, he put forth a univariate model for predicting failure in commercial banks. In comparing two bankruptcy predicting models using financial ratios, (Mous, 2005) found that the decision tree approach performed better than the multiple discriminant analysis (MDA) with decision tree correctly classifying 89% of bankrupt banks within two years while multiple discriminant analysis (MDA) got 81%. The financial ratios used had variables; profitability, liquidity, leverage, turnover and total assets. The changing nature of the banking industry has made such evaluations even more difficult, gingering the need for more flexible alternative forms of financial analysis. These are the parametric methods of; the stochastic frontier approach (SFA), the thick frontier approach (TFA) and the distribution freehall approach (DFA); and the non parametric method of data envelopment analysis (DEA). The empirical evidence of the parametric approaches are; Asaftei (2003), Limam (2002) while the empirical evidence of the non parametric of data envelopment analysis (DEA) are; Cinca and Molinero (2001), Cinca et al (2002), Sathye (2001), Yue (1992), Grigorian and Manole (2002), Su (2004) and Tanko (2006), Wirnkar ( 2007), Wirnkar and Tanko (2007).

In selecting DEA specifications and ranking units via PCA, Cinca and Molinero (2000) were able to identify and rank the 18 Chinese cities in terms of efficiency in utilizing inputs to produce outputs. Maverick cities were also identified that could ignite any directed economic reform by the Chinese government. In evaluating the performance of 60 Missouri Commercial Banks between (1984 1990) using DEA with an intermediary approach of inputs (interest expenses, non-interest expenses, transaction deposits, and non-transaction deposits) with outputs (interest income, non-interest income and total loans), Yue (1992) found that while five of the Missouri banks were technologically efficient, they were not operating at the most efficient scale of operation.

Measuring Inputs and Outputs of Banks

In the banking literature, there has been some disagreement on the definition of banks inputs and outputs and how they could be measured. Su (2004), Mlima and Hjalmarsson (2002), Sathye (2001). These terms from the quantum of services banks provide as well as the different views regarding the treatment of such services as inputs and/or outputs. Banks mostly provide customers with low risk assets, credit and payment services, and play an important role as intermediaries in directing funds from savers to borrowers. They also perform non-monetary services such as protection of valuables, accounting services and running of investment portfolios (Colwell and Davis, 1992) in (Mlima and Hjalmarrson; 2002). Ahmed (1999) identifies these services to include the following: 1) Deposit collection through savings account, current account and fixed deposit account. 2) Provision of credit to customers in form of loans, overdraft, advance, bill discounting, leasing, acceptance of bills, bonds and guarantees.

3) Money transmission services such as cheque, mail transfer, telegraphic transfer etc. 4) Provision of financial services such as tax administration stock exchange services, insurance services, investment advisory services, business advisory services, status enquiry, safe custody, administration of Wills etc. 5) Foreign services, such as travelers cheque, foreign currency, foreign draft, mail transfer, telegraphic transfer, letter of credit, bills of collection and international settlement. Despite the disagreement as to the definition of inputs and outputs in the banking industry, there is a general agreement in the literature among authors on two main approaches that could be used to define the input and output variables in the spectrum of services that banks provide. These two approaches are the production approach and the intermediation approach (Berger and Humphrey 1997), (Piyu, 1992), (Sathye 2001), (Su Wu 2004), (Mlima and Hjalmarrson, 2002). Some authors call the production approach, Service Provision or Value Added Approach (Grigorian and Manole, 2002).

Methodology The purposive sampling method is used to select eleven (11) of the 25 mega banks in Nigeria. The bases used were as follows: (1) They are the ten largest banks in terms of assets values in 2005 except Access Bank (Banking Supervision Annual Report 2005). (2) They rank first from market price per share indices in the banking industry. (3) They successfully emerged from the just concluded consolidation in the banking industry with originality of their names. That is, they either acquired other bank (s) to meet the required capitalization base of 25 billion naira or they individually met the required amount. The only exception is UBA group

that merged with Standard Trust Bank (STB) plc but, this bank satisfied the other two bases. The data for this research work is secondary and will be extracted from the Annual Reports of the banks for a period of nine (9) years (1997-2005). The data except
number of employees is measured in monetary units. The description of the data will be as follows: Input A: Input B: Input C: Output 1: Output 2: Output 3: Number of employees Fixed Assets Deposits Operating Income Deposits Loans

In this way, specifications are defined as inputs mapping onto outputs. As such, a specification whose employees (input A) take deposits (output 2) and place loans in the market (output 3) would be labeled A23. If this specification is augmented with fixed assets (input B) and operating income (output 1) the specification becomes AB123. Specification AB123 treats a deposit bank as a production unit that employs manpower (A) and plant (B) in order to generate income, deposits, and loans. An intermediation model would be described by a specification such as AC13 in which deposits (C) are treated as an input. Under this specification, a deposit bank is an institution whose employees collect deposits in order to make loans and generate income. Other possible ways in which a commercial bank operates give rise to different specifications. In all, there are 33 specifications as follows: Specification A1 A12 A123 A13 A23 Input Employees Employees Employees Employees Employees Output Income Income, Deposit Income, Deposit, Loans Income, Loans Deposit, Loans

 ABC

Employees

Loans

This is followed by the calculation of the efficiency scores using DEA for all specifications. Efficiency scores are on a scale of 0% to 100% for all commercial banks for the period under constant return to scale at maximum average with the Efficiency Measurement System (EMS) 1.30 of Holger Scheel. See www.wiso.uni-

dortmund.de/lsfg/or/scheel/ems/. Next is followed by the calculation of average Capital Adequacy ratios and average Sub-Capital Adequacy ratios for the test of the main hypothesis and Subhypotheses under Capital Adequacy. Then the calculation of the of average Asset Quality ratios and average Sub-Asset Quality ratios for the test of the main hypothesis and Subhypotheses under Asset Quality up until the calculation of average liquidity ratios and average sub-liquidity ratios for the test of the last (5th) hypothesis and Sub-hypotheses. The various CAMEL ratios are as follows:

CAPADR 1 A ratio of total assets to total shareholders funds. It shows the extent to which total assets are supported by shareholders funds. The lower the value of this ratio, the better the financial health of a bank.

CAPADR 2 A ratio of total shareholders funds to total assets. It shows the proportion of a unit naira of equity to a unit naira of asset. The higher the value of this ratio, the better the financial health of a bank. CAPADR 3 A ratio of total shareholders funds to total net loans. It shows the proportion of shareholders funds in granting loans. The higher the value of this ratio, the better the financial health of a bank. CAPADR 4 A ratio of total shareholders funds to total deposits. It shows the capacity of shareholders funds to withstand sudden withdrawals. The higher the value of this ratio, the better the financial health of the company.

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CAPADR 5 A ratio of shareholders funds to contingency liabilities. This measures the extent to which a bank carries off-balance sheet risks. The higher the value of this ratio, the better the financial health of a bank. CAPADR 6 A ratio of total shareholders funds to total risk weighted assets (non performing loans). It measures the ability of a bank in absorbing losses arising from risk assets. The higher the value of this ratio, the better the financial health of a bank. The Asset Quality ratios are divided into two. The mean of these ratios will be used. ASSETQR 1 A ratio of loan loss provision to total net loans. This ratio shows the ability of a bank to meet further losses on total net loans. The higher the value of this ratio, the worsening the financial health of a bank. ASSETQR2 A ratio of loan loss provision to gross loans. It measures the ability of a bank to meet further losses on gross loans. The higher the value of this ratio, the worsening the financial health of a bank. The management quality ratio is defined from the perspective of risk in Asset portfolio (mix). The only ratio here is a ratio of total of risk weighted assets to total assets. The higher the value of this ratio, the worsening the financial health of a bank. The Earnings Ability ratios are two. The average of these ratios will be used. These are: EargAR1 (ROA) A ratio of net profit after tax to total assets. It measures a unit yield of profit to a unit value of assets. The higher the value of this ratio, the better the financial health of a bank. EargAR2 (ROE) A ratio of net profit after tax to total shareholders funds. It measures a unit yield of profit to a unit value of total shareholders funds. The higher the value of this ratio, the better the financial health of a bank. The Liquidity ratios are three. The average of these ratios will be used.

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Liq R1 A ratio of total net loans to total deposits. It shows how far a bank has tied up its deposits in less liquid assets. The higher the value of this ratio, the weaker the financial health of a bank. Liq R2 A ratio of demand liabilities to total deposits. This shows the portion of total deposits that is in the risk of sudden withdrawals. Liq R3 A ratio of gross loans to total deposit. It shows how a bank has tied its deposit in less liquid assets. The higher the value of this ratio, the weaker the financial health of a bank. From the above breakdown of CAMEL ratios, we shall have altogether fourteen hypotheses (five main hypotheses and thirteen sub-hypotheses). The main hypotheses will inform on the relative weight of each factor in CAMEL to capture the wholistic efficiency of a bank. The Sub-hypotheses will inform us on the best ratios to be used for each of the factors in CAMEL. All the hypotheses will be tested using the Independent T-test equation for testing the difference between means (x).see Chambers and Crawshaw, (1990)
/Z/ = (x1 x2) ( 1 2)

12
n1

22
n2

Where / Z / = magnitude of (1) Capital adequacy (2) Asset quality (3) Management quality (4) Earning ability (5) Liquidity X1 = mean of: (6) Capital adequacy (7) Asset quality

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(8) Management quality (9) Earnings ability (10) Liquidity

X2 = mean of gross efficiency scores (performance). 1 = 2 = mean of Population (number of banks)

12= Variance of;

(1) Capital adequacy (2) Asset quality (3) Management quality (4) Earnings ability (5) Liquidity
22 = Variance of gross efficiency scores (performance)

n1 = numerical number of; (1) Capital adequacy (2) Asset quality (3) Management quality (4) Earnings ability (5) Liquidity n2 = numerical number of gross efficiency scores (performance) Decision rule: The Null hypothesis is accepted if the magnitude / Z / falls within / Z /> 1.96 that is -1.96 <Z< +1.96 at 5% level of significance otherwise the Alternative hypothesis is accepted. The two tailed test will be used. This will be followed by the interpretation of the findings, conclusion, recommendations, bibliography and lastly appendices.

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The Data Envelopment Analysis (DEA) DEA is a multi-factor productivity analysis model for measuring the relative efficiencies of a homogenous set of decision making units (DMUs). Talluri (2000) states that the efficiency score in the presence of multiple input and output factors is defined as: Efficiency = Weighted sum of outputs Weighed sum of inputs The procedure for finding the efficiency scores of decision making units (DMU) is formulated as a linear programming problem. Assuming that there are n DMUs, each with M inputs and S outputs, the relative efficiency score of a test DMU p is obtained by solving the following model proposed by Charnes et al (1978). s Vk Ykp max k=1 m Uj Xjp s.t j=1 s Vk Ykp k=1 m Uj Xjp j=1 Vk, Uj Where k j I Yki = = = = l to s, l to m, l to n, amount of output K produced by DMUi,

< 1

>0

k, j,

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Xji Vk Uj

= = =

amount of input j utilized by DMUi, weight given to output K, weight given to input j.

The fractional problem shown as (2) can be converted to a linear program as shown in (3). For more details on model development, see Charnes et al (1978). s max Vk Ykp k=1 m Uj Xjp = 1 j=1 s.t s Vk Ykp k=1 Vk, Uj j=1 m Uj Xjp

< 0

>0

k, j,

4.0 Data Presentation, Analysis and Interpretation This section presents analyses and interprets the data. TABLE I: AVERAGES OF KEY VARIABLES PER BANK PER PERIOD ( 1997-2005) (please see the last table in landscape)

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TABLE II:
CAMEL RATIOS

RESULTS OF THE TEST OF HYPOTHESES CAMEL EFFICIENCY DECISION /Z/

RATIOS SCORES (X)

AV CAPAR AV CAPAR 1 AV CAPAR 2 AV CAPAR 3 AV CAPAR 4 AV CAPAR 5 AV CAPAR 6 AV ASSET QR AV ASSET QR 1 AV ASSET QR 2 AV MGQR AV EARGAR AV EARGAR 1 AV EARGAR 2 AV LI QR AV LI QR 1 AV LI QR 2 AV LI QR 3

3.3658 12.4293 0.09866 0.4441 0.1535 0.8068 6.3081 0.1094 0.1738 0.0450 9.0518 0.1941 0.0270 0.3611 0.5122 0.4212 0.638690.5 2 0.4769

90.52 90.52 90.52 90.52 90.52 90.52 90.52 90.52 90.52 90.52 90.52 90.52 90.52 90.52 90.52 90.52 90.52 90.52

-12.5620 -9.3464 -13.2321 -13.1688 -13.2238 -12.7329 -8.3320 -13.2297 -13.2189 -13.2399 -13.2389 -13.2129 -13.2427 -13.1736 -13.1708 -13.1831 -13.1519 -13.1753

RULE Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho Reject Ho

SUB CAMEL RANkING

CAMEL RANKING

1st
2
nd

6th 4th 5th 3rd 1st 4th 1 2nd 5th 3rd 2nd 1st 2nd 3 1st
rd st

2nd

SOURCE: AUTHORS COMPUTATION. SEE APPENDIX F

From the above table, the following findings are unveiled: That no factor in CAMEL is able to capture the wholistic efficiency of a bank. This is evidenced by the rejection of the null hypotheses in all the main and sub-hypotheses. The proximal weights or ability of each factor in CAMEL to capture the wholistic performance of a bank are ascertained. This yielded an order in ranking the factors in CAMEL to CLEAM. As such, giving us a new acronym for CAMEL as CLEAM to reflect the ability of each of the factors to capture a wholistic performance of a bank. In consideration of sub-hypotheses under capital adequacy, the best ratio is CAPAR 6 which is a ratio of total shareholders fund to total risk weighted assets. The other five capital adequacy ratios are rated accordingly. In consideration of the asset quality ratios, Asset quality ratio1 comes first. This is a ratio of Loan Loss provision to total net loans. And lastly, Assets Quality ratio 2.

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We also found that the best Earnings Ability ratio is the ratio of net profit after tax to total shareholders fund. The best liquidity ratio is liquidity ratio 2, a ratio of demand liabilities to total deposit.

Conclusions The following table summarizes our findings: TABLE 3: CAMEL RATINGS OF THE BEST RATIO UNDER EACH FACTOR C CAPITAL ADEQUACY RATIO The ratio of total shareholders fund to total risk weighted assets. L E LIQUIDITY RATIO EARNING ABILITY RATIO The ratio of demand liabilities to total deposit The ratio of net profit after tax to total shareholders fund A ASSET QUALITY RATIO The ratio of loan loss provision to total net loans M
MANAGEMENT QUALITY RATIO

The ratio of risk weighted assets to total assets

Source: Authors Tabulation from the Test of Hypotheses. See Results In Table Ii The way forward is to stick to the above acronym (CLEAM) and consider in particular the identified ratios under each factor.

The following recommendations are made. First, the acronym of CAMEL should be changed to CLEAM in order to reflect the weight in importance in each of the factors. The best capital adequacy ratio to be used by banks regulators should be the ratio of total shareholders fund to total risk weighted assets. The best liquidity ratio to be used by banks regulators should be the ratio of demand liabilities to total deposit. The best Earnings ability ratio to be used by banks regulators should be the ratio of net profit after tax to total shareholders fund.

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More so, the best Asset Quality ratio is the ratio of Loan Loss Provision to total net loans. And lastly, the best management quality ratio is the ratio of risk weighted assets to total assets. It is also recommended that more research be conducted in this area of banks performance evaluation. Other versions of DEA such as the DEA solver pro, Frontier Analyst, Onfront, Warwick DEA, DEA Excel Solver, DEAP and Pioneer should be explored in application in the banking industry.

Bibliography

Altman I. Edward (1968) : Financial Ratios, Discriminant Analysis and Prediction of Corporate Bankruptcy in Journal of Finance, September, 1968, New York University. Annual Reports and Accounts of the banks (1997-2006) Berger A.N, and Humphrey, D.B., (1997): Efficiency of financial

Institutions: International Survey and Directions for Future research, European Journal of Operational Research, University of Pennsylvania Cinca et al (2002): Behind DEA Efficiency in Financial Institutions: Discussion Paper in Accounting and Finance, Number AFO2-7, School of Management, University of Southampton Crawshaw J.and Chambers J. (1984): A Concise Course in A-Level Statistics, Second Edition, Bath Press, Avon, Britain. David A. Grigorian and Vlad Monola (2002:5&6) Determinants of Commercial Bank Performance in Transition: An Application of Data Envelopment Analysis, World Bank Policy Research Working Paper 2850, June 2002.

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Efficiency Measurement System (EMS) 130 of Holger Scheel at www.wiso.unidortmund.de/lsfg/or/scheel/ems/ Gabriel Asaftei (1995) and Kumbhakar(1995) @ www.fma-

org/siena/papers/720495.pdf Efficiency of banking in

Regulation and a transition

economy,Department of Economics, University of Richmond, VA, 23179, USA. Imed Limam (2002): Measuring Technical Efficiency of Kuwaiti Banks: Arab Planning Institute, Kuwait. Kuru Lawan Ahmed (1999):The Marketing of Banking Services in the Current Competitive Environment: A Case Study of Habib Nigeria Bank Ltd Lonneke Mous (2005): Predicting bankruptcy with discriminant analysis and decision tree using financial ratios, University of Rotterdam. Malami M. Maishanu (2004:76): A univariate Approach to Predicting failure in the Commercial Banking Sub-Sector in Nigerian Journal of Accounting Research, Volume 1, Number 1, Department of Accounting, Ahmadu Bello University, Zaria. Milind Sathye (2001): Efficiency of Banks in a Developing Economy: School of Accounting and Finance, University of Canberra. Mlima and Hjalmarrsom (2002): Measurement of Inputs and Outputs in Banking Industry: Tanzanet Journal (2002), Volume 3(1), University of Gothenburg. Muhammad Tanko (2004): A Data Envelopment Analysis of Banks Performance in Nigeria. In Nigerian Journal of Accounting

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Research, Volume 1, Number 4, Department of Accounting, Ahmadu Bello University, Zaria Piyu Yue (1992:31): Data Envelopment Analysis and Commercial Bank Performance: A Primer with Applications to Missouri Banks, IC2 Institute, University of Texas at Austin. Serrono C. et al (2001): Selecting DEA Specifications and Ranking Units via PCA: Discussion Papers in Management, Number MO1-3, and University of Southampton. Thomas F. Siems and Richard S. Barr (1998): Benchmarking the Productive

Efficiency of U.S. Banks: Financial Industry Studies, Federal Reserve Bank of Dallas.
Wirnkar A.D. and Tanko M (2007): A post consolidation Appraisal of Commercial Banks Efficiency in Nigeria. In Nigerian Journal of

Accounting Research, Volume , Number , Department of Accounting, Ahmadu Bello University, Zaria

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TABLE 7 SUMMARY OF AVERAGE KEY VARIABLES PER BANK PER PERIOD S / N 1 2 3 4 5 6 7 8 9 1 0 1 1 BAN KS ACB AFB FBN GTB ICB OCB UBA UB ZB DB AV CAPA RI 8.2504 19.254 8 11.376 0 8.6227 7.4299 23.274 6 16.217 1 11.540 1 9.6517 AV CAPA R II 0.1310 0.718 0.0915 0.1221 0.1409 0.0568 0.0655 0.0891 0.1049 AV CAPA R III 0.4120 0.2844 0.3894 0.3453 1.3836 0.2724 0.3197 0.4498 0.3937 AV CAPA R IV 0.2397 0.0980 0.1361 0.2131 0.2070 0.0790 0.0918 0.1312 0.1859 AV CAPA RV 0.9089 0.6326 0.7215 0.6824 1.7374 -3.7283 0.4477 0.8830 1.9710 AV CAPA R VI 3.0856 0.9788 1.0261 15.118 6 4.1031 4.9293 4.2836 1.3502 26.538 6 6.2513 AV CAPA R 2.1713 3.5534 2.2901 4.1840 2.5003 4.1473 3.5709 2.4072 6.4743 AV ASET QR I 0.1229 0.3395 0.3850 0.0370 0.0665 0.2506 0.1729 0.3248 0.0272 AV ASET QR II 0.0416 0.0877 0.0875 0.0133 0.0177 0.0684 0.0359 0.0684 0.0074 AV ASET QR 0.0823 0.2136 0.2363 0.0252 0.0421 0.1595 0.1044 0.1966 0.0173 AV MGA R 0.0514 0.0670 0.0965 0.0090 0.0503 0.0831 0.0299 0.0778 0.0042 AV EAR I 0.0127 0.0080 0.0250 0.0405 0.0407 0.0538 0.0133 0.0202 0.0388 AV EAR II 0.1162 0.1285 0.2750 0.3477 0.2984 1.5304 0.2046 0.2334 0.3727 0.2753 0.1896 3.9718 0.3611 = AV EAR 0.0645 0.0683 0.1500 0.1941 0.1696 0.7921 0.1090 0.1268 0.2058 0.1506 0.1038 2.1346 0.1941 AV LIQR I 0.6084 0.3521 0..3515 0.6190 0..3475 0.3412 0.2959 0.3003 0.4782 0.3958 0.5432 4.6331 0.4212 AV LIQR II 0.6093 0.6956 0.7410 0..5680 0..3865 0.7216 0.6553 0.6176 0.7098 0.6466 0.6733 7.0246 0.6386 AV LIQR III 0.6830 0.4644 0.4365 0.5676 0.3725 0.4327 0.3463 0.3979 0.4913 0.4342 0.6198 5.2462 0.4769 AV LIQ R 0.63 36 0.50 40 0.50 97 0.58 49 0.36 88 0.49 85 0.43 25 0.43 86 0.55 98 0.49 22 0.61 21 5.63 47 0.51 22 AV.EFFI CIENCY SCORES 83.84 81.67 87.52 100 94.57 100 100 83.90 89.90 90.99 83.36 995.75 90.75

10.503 0.0991 0.3522 0.1493 0.7409 3.0161 0.0404 0.0109 0.0257 0.0264 0.0259 6 WB 10.101 0.1118 0.2820 0.1572 3.8776 1.7240 2.7090 0.1453 0.0557 0.1005 0.0746 0.0180 5 AV 136.72 1.0845 4.8845 1.6883 8.8747 69.389 37.023 1.9121 0.4945 1.2035 0.5702 0.2969 KV 24 2 9 12.429 0.0986 0.4441 0.1535 0.8068 6.3081 3.3658 0.1738 0.0450 0.1094 0.0518 0.0270 X 3 SOURCE: RESEARCHERS COMPUTATION = Summation, KV = Key Variation , AV = Average, X

Mean per key variable

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