To evaluate commercial banks performance in Malaysia by using CAMEL framework : an analysis with ROA, ROE and EVA

This paper intends to evaluate the commercial banks performance in Malaysia by using CAMEL framework with assessment through conventional accounting measures of Return on Asset (ROA) and Return on Equity (ROE) and Economic Value Added (EVA) as measurements for banking industry performance. It able to provide overview and better understanding on bank’s financial performance as well as to identify factors which affect bank performance and hence to improve in risk management to reduce losses to the bank. This study has been conducted by using 16 commercial banks comprises of local and foreign banks for the 5 years period from 2013 to 2017. The findings of this study suggested that CAMEL variables are significant in ROA, ROE and EVA models except for liquidity which is insignificant to ROE. The study concluded that EVA model has better explanation in bank financial performance as compared to ROA and ROE.