Nisha Agrawal

PG-10-02
CAMEL RATIO
Sr. No
Ratio

Formula

2011

2010

2009

2008

2007

1 Capital Adequacy Ratio

Tier I Capital(Basel II)

Tier II Capital(Basel II)
Risk Weighted Assets

6.31
6.83
6.97
5.33
5.4
6.15
116619
92181
79572.00
0.009981221 0.013267376 0.016488212

2 Asset Quality(%)

Net NPA
Loans & Advances

847
129725.41
0.652917591

3 Management Quality

Non Interest Expense

Total Assets

4931.21
2731
2373.46
2162.19
2255.04
209757.33
182671.62
147655.22
123955.79
93008.08
2.350911919 1.495032421 1.607433818 1.744323499 2.424563436

NPAT
Total Capital Employed

1,252.41
1,058.23
571.24
550.16
498.01
209757.33
182671.62
147655.22
123955.79
93008.08
0.597075687 0.005793073 0.003868742 0.004438357 0.005354481

4.2 EBITDA Margin(%)

EBIT
Total Income

1659.17
1549.54
924.98
851.94
695.31
16485.61
13799.55
11525.16
8786.61
6709.86
10.06435523 11.22890117 8.025767313 9.695932864 10.36254561

4.3 Leverage Ratio

Debt
Total Funds

4.4 ROE(%)

Net Profit After Tax

Equity Capital

1,252.41
1,058.23
571.24
550.16
498.01
4817
3475.15
3149.29
2495.05
1896.68
25.9997924 30.45134742 18.13869158 22.05005912 26.25693317

4.5 ROA(%)

Net Profit After Tax

Total Assets

1,252.41
1,058.23
571.24
550.16
498.01
209,757.33 182,671.62 147,655.22 123,955.79
93,008.08
0.597075678 0.579307284 0.386874233 0.443835661 0.535448103

4.6 Net Interest Margin

Interest Income
Interest Expense/
Total Assets

4 Earnings Ability
4.1 ROCE(%)

5 Liquidity Risk

Reserves & Surplus

Total Assets

6 Sensitivity to
Market Risk

Beta

12887.98
8847.72
1.46

15220.57
9895.23
209757.33
2.54

727
1,063.00
1,060.00
878
105383.49
85483.20
72997.43
51795.47
0.68986141 1.243519258 1.452105942 1.695129051

7326.64
7692.25
0.95

804.25
6412.05
0.13

12064.31
9519.01
182671.62
1.39

10455.19
8226.72
147655.22
1.51

6826.58
5921.11
209757.33
182671.62
0.032545122 0.032413931

5090.91
147655.22
0.03447836

1.16

0.98

1.01

449.10
5942.76
0.08

7995.54
5772.47
123955.79
1.79

782.01
3789.83
0.21

6234.21
3759.79
93008.08
2.66

4738.62
2665.68
123955.79
93008.08
0.0382283 0.028660777
0.91

0.87

INTERPRETATION OF THE CAMEL RATIO

CAR-This ratio is used to protect depositors and promote the stability and efficiency of financial systems.
The Capital adequacy ratio of 2011 is in a declining stage as compared to 2010 and 2009.
Asset Quality:-Asset quality ratio states the quality of the loans provided which can turn bad, i.e NPA.
The asset quality of central bank is improving (NPA is reducing) trend from 1.70% in 2007 to 0.65% in
2011.

Management Quality:-This ratio compares the Non interest expense to the total assets which is showing
a improving from 1.50 in 2010 to 2.35 in 2011.

ROCE(%):- The returns on the capital employed in the business has increased from 2007 to 2011.And
the ROCE in 2010 was 0.57% which is now increased to 0.60% in 2011.

EBITDA Margin(%):-The earnings of the bank has increased from 2007 to 2010 and a small dip in the
earnings is to be seen in 2011 i.e from 11.22% the earnings dip to 10%.\

Leverage Ratio:-The leverage ratio depicts the debt to total fund employed by the bank. The ratio is
improving from 2007 till 2011, i.e 0.21 to 1.46

ROE(%):- Return on equity shows how much the bank is able to provide returns on the shareholders
money. Central bank of indias ROE has seen a dip from 30.45% in 2010 to 26% in 2011.

ROA(%):- This ratio shows how much profit the bank is able to generate by using the asset. The ratio
has increased from 2007 to 2010 and is constant in 2011 as compared to 2010.

Net Interest Margin:- Net Interest Margin is the difference between the interest earned on loans and
payed on deposits divided by the total assets of the bank. If the difference is positive it implies the bank is
making profit by charging more interest than it pays on deposits. The ratio is improving from 1.39 in
2010 to 2.54 in 2011.
Liquidity Risk:-This ratio measures the amount of liquid assets the bank has to fund any immediate
requirement in relation to its total asset. The ratio had been constant for the bank since 2008 to 2011 at
0.03:1.

Technical Chart of Central Bank of India.

Here in the above chart of central bank the MACD is crossing the signal line downward in December
2011 towards the extreme right which indicated a buy option as it suggest a trend reversal and also the
RSI-range 20-80 states that the stock is over sold as its almost crossing the 20 range of RSI. So Looking
at both of this parameters and the chart and Bollinger bands a buy call can be taken but before that a
critical monitoring is require for few more days ,so that a clear picture can be depicted for conformation
to take a buy call.