Tarawneh 2006 in his study measured the performance

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Tarawneh (2006) in his study measured the performance of Oman commercial banksusing financial ratios and ranked the banks based on their performance. The study22 |P a g e
analysis to investigate the impact of asset management, operational efficiency and banksize on the performance of Oman commercial banks. The findings indicated that bankperformance was strongly and positively influenced by operational efficiency, assetmanagement and bank size. Samad (2004) investigated the performance of seven locallyincorporated commercial banks of Bahrain during the period 1994-2001. Financial ratioswere used to evaluate the credit quality, profitability, and liquidity performances. Theperformance of the seven commercial banks was compared with the banking industry inBahrain which was considered a benchmark. He applied a Student’s t-test to measure thestatistical significance for the measures of performance. The results revealed thatcommercial banks in Bahrain were relatively less profitable, less liquid and were exposedto higher credit risk than the banking industry, in which wholesale banks are the maincomponent.However, even if there are several researches in the area of banks performance evaluationin other countries (both developed and developing), as to the extent of the researcherknowledge; in Ethiopia there are a little studies on these area particularly using CAMELmodel to evaluate the performance of commercial banks and the impact of Globaleconomic crisis on the performance of commercial banks of Ethiopia. It is against thisbackdrop that the present study undertaken to fill up this gap.23 |P a g e
Chapter Three3. Methodology3.1 Research DesignThe primary objective of this study is to measure and analyze the financial performanceof Ethiopian commercial banks and effect of global financial crisis on their performanceduring the period 2004/5-2010/11 using basically CAMEL model. Hence, to achieve thisobjective survey strategy of inquiry particularly longitudinal type employed. Becausesurvey allows economy of accessing data which may not be available from other sources;being able to identify attributes of a large population from a small group of individuals(Babbie 1998, Fowler 2010)The following section has four parts. The first part deals about the source of data andcollection methods. Then the second, third and the fourth parts deals about samplingdesign, data analysis method and variables descriptions respectively3.2 Source of Data and Collection MethodAlthough accounting data in financial statements is subject to manipulation and financialstatements are backward looking, they are the only detailed information available on thebank’s overall activities (Sinkey, 2002). Furthermore, they are the only source ofinformation for evaluating the firm's potential to generate satisfactory returns andachieving the interest of stock holders in future. Hence, this study is mainly usedsecondary data drawn from the annual audited financial statements and annual reports ofthe banks..

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