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  • Camels 03

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    Asset quality refers to a bank's loan portfolio, where a higher proportion of classified/non-performing loans indicates poorer quality. Management capability is determined by how well a bank can react during financial stress, as evidenced by maintaining good capital and asset quality. Earnings are evaluated based on returns on assets (ROA), with stable and growing ROA reflecting positively on a bank.

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    Asset quality refers to a bank's loan portfolio, where a higher proportion of classified/non-performing loans indicates poorer quality. Management capability is determined by how well a bank can react during financial stress, as evidenced by maintaining good capital and asset quality. Earnings are evaluated based on returns on assets (ROA), with stable and growing ROA reflecting positively on a bank.

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    11 views1 page

    Camels 03

    Uploaded by

    Mahira
    Asset quality refers to a bank's loan portfolio, where a higher proportion of classified/non-performing loans indicates poorer quality. Management capability is determined by how well a bank can react during financial stress, as evidenced by maintaining good capital and asset quality. Earnings are evaluated based on returns on assets (ROA), with stable and growing ROA reflecting positively on a bank.

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    CAMELS

    Asset quality: the most important assets of the bank is the loan that it provides. If any bank has
    huge amount of classified loans, we can say that the asset quality of that bank is bad and if the
    bank has more unclassified loan, we can say the bank has been more careful about giving loans
    by doing a lot of analysis and that’s why their asset quality is good.

    Management: It involves when there is financial stress in the economy an institution can
    properly react to it or not. When a bank has good capital and asset quality, their management
    capability is good.

    Earnings: it is important for bank to check whether it has a growth and stability on the earning
    or not. Earnings is judged based on the returns on assets (ROA).

    Liquidity: liquidity is important for customers withdrawal demand. Bangladesh bank has issued
    NSFR to limit over reliance on short term funding and liquidity coverage ratio to assess the
    exposure to liquidity

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