Research Article

Effect of CAMELS Rating on Financial Performance of Systemically Important Banks (SIBS) Listed in Nigeria

Mangai Ishaya Musa1*, Christopher Osega Otubor2, Dusu Samuel Pam1
1 Department of Banking and Finance, Plateau State Polytechnic, Barkin-ladi, Plateau State, Nigeria
2 Department of Banking and Finance, Faculty of Management Sciences, University of Jos, Jos, Plateau State, Nigeria
* Corresponding author: mangi.mni35@gmail.com
Published: Dec, 2025
DOI: 10.67862/jbfr.2025.jxujnf3a
Pages: 69-83
Views: 70
Downloads: 58

Abstract

This study examines the effects of CAMELS rating on the financial performance of SIBs listed in Nigeria, using CAMELS model rating; capital adequacy, asset quality, management quality, earnings ability, liquidity and sensitivity to market risk. Data were collected from the annual reports and accounts of seven systemically important banks (SIBs) in Nigeria, such banks include: First Bank of Nigeria, Guaranty Trust Bank, Zenith Bank, United Bank for Africa, Access Bank, Fidelity Bank, and Ecobank Nigeria as sampled banks over the period 2015-2024 and analysed using Pearson correlation and multiple regressions. The study finds that capital adequacy, asset quality, earnings ability, management quality and sensitivity to market risk are strong determinants of the financial performance of SIBs in Nigeria. Consequently, the study recommends an upward review of capital level periodically in order to enable deposit money banks in Nigeria diversify their business operations, absorb unexpected losses, strengthen their liquidity position and consequently, compete internationally, just like the recent on-going recapitalisation policy of the CBN. Here the upgrade for deposit money banks (commercial banks) going international is 500 billion, national 200 billion and regional 50 billion naira as a recent monetary policy of the Central Bank of Nigeria, which was introduced in March, 2024.

Keywords

CAMELS Rating Financial Performance SIBs in Nigeria ROA ROE

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How to Cite

Musa, M. I., Otubor, C. O., & Pam, D. S. (2025). Effect of CAMELS Rating on Financial Performance of Systemically Important Banks (SIBS) Listed in Nigeria. Journal of Banking and Finance Research, 1(1), 69-83. https://doi.org/10.67862/jbfr.2025.jxujnf3a

M. I. Musa, C. O. Otubor, and D. S. Pam, "Effect of CAMELS Rating on Financial Performance of Systemically Important Banks (SIBS) Listed in Nigeria," Journal of Banking and Finance Research, vol. 1, no. 1, pp. 69-83, December 2025. doi: 10.67862/jbfr.2025.jxujnf3a

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