AN APPLICATION OF CAMELS MODEL IN EVALUATING VIETNAM’S COMMERCIAL BANK PERFORMANCE: A RESEARCH AT VIETCOMBANK

Abstract

In order to become one of the world top 300 banking and financial groups  with the best international procedures, Vietcombank - one of the four largest commercial banks in Vietnam, has continuously gathered all resources to ensure the bank’s safe operation based on international standards as well as improve its risk management capacity. This study uses the CAMELS analysis framework and Basel II standards, along with the regulations of the State bank of Vietnam to analyze the business performance of Vietcombank. The results illustrate that Vietcombank shows a safe and healthy level of assurance in terms of C (Capital Adequacy), A (Asset Quality), M (Management Soundness) and E (Earnings and Profitability). The study also proposes a number of solutions to contribute to improving Vietcombank’s performance and soundness, in which priority is given to increasing capital and improving NIM as an urgent matter to implement piloting Basel II according to the roadmap regulated by the State Bank of Vietnam as well as enhancing Vietcombank's position in the region and in the world.