Abstract
The banking sector of Bangladesh is becoming more complicated than before. Ensuring the financial stability of the economy, monitoring, supervision, and continuous performance evaluation of the banking sector are compulsory. The present study, therefore, is an attempt to evaluate and compare the performance of our banks. One of the most effective supervisory techniques, CAMELS rating system has been used to benchmark and rate the banks based on their performance. In this study, 21 private commercial banks (PCBs) have been chosen as samples to meet the purpose of the study. Data for analysis has been collected from the banks’ annual reports for the period of 2008 to 2018. The result shows that none of the banks could achieve a 'strong' position, and only SEBL was able to secure a ‘satisfactory’ mark. Unfortunately, AB bank was rated "marginal" in the composite rating, which is the lowest rating among the sample banks. Hence, AB bank needs to develop reform and follow-up programs as soon as possible to avoid financial failure.
Highlights
Since the banking industry has become globalized and liberalized, so clients everywhere in the world would quickly look forward to the identical world-class support from any bank offering a similar service, as customers always expect better service; benchmarking is a competitive strategy to win over the market shares, and a survival approach for threatened businesses and industries
The population of the study is, all the private commercial banks (PCBs) that are enlisted in the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE)
21 PCBs have been selected for the study to evaluate their performance based on CAMELS components
Summary
Since the banking industry has become globalized and liberalized, so clients everywhere in the world would quickly look forward to the identical world-class support from any bank offering a similar service, as customers always expect better service; benchmarking is a competitive strategy to win over the market shares, and a survival approach for threatened businesses and industries. Banks should conduct benchmarking with their competitors or banks having excellent performance in the banking industry operating anywhere in the world. Banks can benchmark with their affiliates, sister companies, and subsidiaries which may be performing specific practices a lot better than the bank does. Banks can benchmark their performance with companies outside the industry whose approaches can be tailored to the banks themselves. Banks can realize their rating of performance in specific key areas. CAMELS is used as a benchmarking tool to evaluate the performance of commercial banks
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