Table 2 Rating base of CAMEL Components. Source: Babar and Zeb [2]
Rating components | Rating 1 | Rating 2 | Rating 3 | Rating 4 | Rating 5 |
|---|---|---|---|---|---|
Capital adequacy ratio | ≥ 15% | 12–14.99% | 8–11.99% | 7%–7.99 | ≤ 6.99% |
Assets quality ratio | ≤ 1.25% | ≤ 2.5–1.26% | ≤ 3.5–2.6% | ≤ 5.5–3.6% | ≥ 5.6% |
Management efficiency | ≤ 25% | 30–26% | 38–31% | 45–39% | ≥ 46% |
Earnings capacity ROA | ≥ 1% | 0.9–0.8 | 0.35–0.7 | 0.25–0.34 | ≤ 0.24 |
Earnings capacity ROE | ≥ 22% | 17–21.99% | 10–16.99% | 7–9.99% | ≤ 6.99 |
Liquidity Ratio | ≥ 50% | 45–49.99% | 38–44.99% | 33%–37.99 | ≤ 32% |