Contabilidade e Marketing

Performance Evaluation of Iranian Banking Industry through CAMELS Framework

Abstract

Mohammad Khodaei Weleh Zagherd and Mehrdad Barghi

This research performs an empirical study on the performance evaluation of Iranian banking industry through CAMELS framework. The research method is applied in terms of objective, and correlational according to the type of method. Time domain of research is from 2007 to 2015. The research data are annually collected and extracted from financial statements of operating banks in the Iranian banking industry. Pooled and Panel hybrid regression model with fixed effects are used to analyze the research data and test the hypotheses. Based on the results of research model, the impact of capital adequacy, asset quality, management quality, liquidity quality, and sensitivity to market risk indicators is direct and significant on the return on assets of banks in the Iranian banking industry, but the effect of earnings quality is rejected on the return on assets of banks in the Iranian banking industry.