Abstract:
Purpose. This study uses the CAMEL method to observe the financial performance of Pakistani
commercial banks before and after the COVID-19 pandemic, directing capital adequacy, asset
quality, management efficiency, earning quality, and liquidity positions.
Methodology: Secondary data from financial statements of 15 commercial banks in Pakistan
(2013-2023) were analyzed using descriptive and numerous regression analyses, along with
diagnostic tests to confirm validity.
Findings: The fixed effect model illustrates that higher capital adequacy and net interest margin
are associated with increased ROA, while higher non-performing loans and net interest expenses
are associated with decreased ROA. A dummy variable for COVID-19 indicates the pandemic
negatively impacted ROA, highlighting its adverse effects on bank performance.
Value/Originality: This study applies the CAMEL approach to assess the financial performance
of Pakistani banks pre- and post-COVID-19, contributing valuable insights for crisis management
and bank performance evaluation for regulators and policymakers.
Result: Results show improved capital adequacy and earning quality, likely due to regulatory
support and digital banking. However, asset quality, managerial efficiency, and liquidity
worsened, leading to lower profitability. Strategic measures are needed to enhance resilience and
stability in the sector.
