CAMELS FINANCIAL RATIOS ANALYSIS AS THE PREDICTORS OF BANK PROBLEMS THAT LISTED IN THE DIRECTORY OF INDONESIAN BANKING FROM 2002-2006
| Main Author: | Nurazi, Ridwan |
|---|---|
| Format: | Proceeding PeerReviewed Archive |
| Bahasa: | eng |
| Terbitan: |
, 2017
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| Subjects: | |
| Online Access: |
http://repository.unib.ac.id/11617/1/CAMELS%20financial%20ratios%20analysis.pdf http://repository.unib.ac.id/11617/ |
Daftar Isi:
- This study aimed to provide empirical evidence on factors affecting bankruptcy and financial troubles of a banking institution. The factors tested in determini ng th e bankrupt cy condit ion and company’s troub les were CAMELS ratios related to the regulations of the Bank of Indonesia. CAMELS ratios are stand for Capital adequacy, Assets quality, Management quality, Earnings, Liquidity, and Sensitivity to market risk. The samples of the study consisted of 10 healthy banks, one bank experiencing bankruptcy, and 4 banks experiencing financial trouble condition. The statistical method used to test the hypothesis of the study was a logistic regression. The result of the study indicates that the CAMELS ratios had a clarification power or a predictable power toward the banks experiencing financial troubles and the banks experiencing bankruptcies. This study also proved that the ratios of CAR (capital adequacy ratio), P-PPAP, ROA (return on assets), ROE (return on equity), NIM (net interest margin), and LDR (loan to deposit ratio) were statistically different from the condition of the bankrupt banks and the banks experiencing financial troubles compared to the bank that did not experience financial troubles.