Evaluation of Financial Performance: A Comparative Study of Selected Commercial Banks in Ethiopia

Abstract

This study is aimed at evaluating the financial performance and ranking the performance of the selected commercial banks in Ethiopia for the period 2011 to 2017. To meet the objective of the study, secondary sources of data, such as annual reports of the banks have been utilized. After collecting the necessary data, appropriate financial ratios, descriptive statistical techniques and average, percentage, and proportion were employed for analyzing, interpreting, ranking, transformation of data and giving a condensed picture of the collected data. Accordingly, the results of the study revealed that the financial performance of the bank in a measure of profitability CBE, DB and WB occupies the first three positions respectively. In a liquidity measure WB ranks first, BOA ranks second and UB ranks the third position. In a risk and solvency measure NIB, BOA and UB covers the first three positions. In an efficiency measurement CBE occupies the first, WB occupies the second and NB occupies the third position. In the overall measure of banks financial performance WB, NIB and UB occupies the first three positions respectively.

Keywords: Financial performance, ratios, ranking, banking sector, Ethiopia

DOI: 10.7176/EJBM/11-7-06

Publication date:March 31^st 2019