This is because mainly due to bank specific related

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bank specific related factors and different business experience in the Banking industry. For example new bank had better Capital adequacy position relative to the old banks. The Empirical CAMEL model findings regarding the elements of the model and profitability as measured by ROA and ROE suggest the following: The relationship between capital adequacy Ratio and Profitability is negative. As to the level of significance the result shows capital adequacy ratio is insignificant for ROA even at 10% significant level while it was significant for ROE at 1% significant level. The relationship between Asset quality ratio and profitability is negative and with 1% significance level statistically significant for ROA whereas insignificant level ROE. As to the relationship between Management efficiency ratio and profitability is negative and statistically significant at 1% significance level. In addition to this the coefficient of the variable was relatively high for both profitability measures. The result showed Positive relationship between Earning ratio and Profitability with strong statically significance. The result showed positive relationship between Liquidity ratio and profitability. The result shows liquidity ratio was statically significant at 5% significant level. 5.3 Recommendation Based on the findings of the study the following recommendations were forwarded. The study revealed asset quality ratio, Management efficiency, Earning ability and liquidity are the key driver of return on asset of commercial banks in Ethiopia similarly the study also identified capital strength, management efficiency ,earning ability and Liquidity as the key drivers of return on equity of Ethiopian Commercial banks.
57 Therefore, Bank managers are advised to give due attention to those variables to improve profitability. The current study uses only some representative financial ratios from factors of the CAMEL model, the financial ratios included in the research may not exhaustive and enough to evaluate the bank’s Capital adequacy, asset quality, earning ability and liquidity. Therefore future researcher is recommended to consider additional financial ratios. The CAMEL model is useful rating tools for banking sectors, However, the tool can be equally be applicable to other related financial institution Like Micro Finance Institution and Insurance Companies. Thus, future research is recommended to use the CAMEL model for such kind of institution. Furthermore bank performance is now a day’s seen from the perspective of economic value added (EVA) in addition to the usual ROA and ROE measures. The CAMEL model has also the sixth dimension referred as sensitivity to the market. Therefore, future research would make relevant contribution if it considers those two developments into the research the model i.e. EVA to measure bank performance and sensitivity to the market as the sixth dimension of the CAMEL model.

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