A Comparative Analytical Study of Bank Performance in Algeria According to the CAMELS Model -The National Bank of Algeria and Al Salam Bank as Model-

Abstract

This study seeks to shed light on the evaluation of the financial performance of banks in Algeria by conducting an analytical and evaluative comparison between conventional banks, represented by the National Bank of Algeria, and Islamic banks, represented by Al Salam Bank, using the CAMELS model. The study adopted the descriptive-analytical approach to diagnose the reality of the banks and identify strengths and weaknesses in the composite components of the model. This was done by collecting published financial data for the period 2020 to 2023 and then analyzing it according to the model.

The results of applying the study model revealed a noticeable variation in the level of financial stability and operational efficiency between the two banks in the research sample. The National Bank of Algeria succeeded in obtaining a composite CAMELS rating of (1), which reflects a fundamental superiority in most of the model’s components, indicating outstanding financial performance and a high capacity to withstand capital-related risks. In a related context, the results showed that Al Salam Bank received a rating of (2), which classifies the bank’s overall performance as “good.” The bank demonstrated a tangible ability to face economic challenges, with a slight weakness in liquidity that requires improvement measures to enhance the bank’s operational processes toward better financial performance in the future. The study also emphasizes the need to adopt the CAMELS model as a periodic supervisory tool for early warning, in order to ensure proactive detection of financial and administrative weaknesses in the performance of banks in Algeria by comparing actual performance with the standards set by the model. This helps in formulating a robust management strategy.