A Comprehensive Analysis of the IOB Bank's Financial Stability Using the CAMEL Model

Karthikeyan A; S Pougajendy PhD

doi:10.56201/ijbfr.vol.11.no8.2025.pg117.125

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A Comprehensive Analysis of the IOB Bank's Financial Stability Using the CAMEL Model

Karthikeyan A, S Pougajendy PhD

Abstract

The CAMEL assessment of Indian Overseas Bank over the last five years highlights a mixed financial position. The bank has demonstrated strength in capital adequacy, maintaining a healthy capital base that ensures compliance with regulatory requirements and provides resilience against potential risks [3]. Similarly, the liquidity position remains stable, indicating the bank’s ability to meet its short-term obligations and manage unexpected withdrawals effectively. However, persistent challenges are observed in asset quality, with rising non-performing assets continuing to affect the overall financial soundness. Weak asset quality not only increases the risk burden but also negatively impacts profitability. In terms of earnings, although the bank has shown marginal improvement, returns remain modest compared to industry peers, which reflects the need for stronger revenue generation strategies and cost management. Management efficiency appears moderate, with operational effectiveness improving but still requiring better resource utilization and stronger risk control mechanisms. Overall, the CAMEL composite score places Indian Overseas Bank in a “stable but vulnerable” category. While the bank is not at immediate financial risk, its long-term stability depends on addressing asset quality issues and enhancing earnings performance. Strengthening risk management, improving recovery processes, and diversifying income sources will be crucial to secure sustainable growth and competitiveness in the evolving banking sector.

Keywords

CAMELIndian Overseas BankFinancial StabilityAsset QualityBanking

References

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A Comprehensive Analysis of the IOB Bank's Financial Stability Using the CAMEL Model

Abstract

Keywords

References

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