Evaluating bank performance using the SCAMEL model: A case study on the National Commercial Bank.

Abstract

The study aims to introduce a proposed evaluation model SCAMEL for assessing the performance of the banking sector, with a case study of the National Commercial Bank. This model incorporates a Shariah compliance indicator into the traditional CAMEL framework. The research problem that consists of in the limitations of conventional performance evaluation systems, which fail to adequately assess the Shariah compliance of Islamic financing tools. To address this, the study adopts a descriptive and deductive approach to collect and analyze the financial data related to the SCAMEL model as applied to the National Commercial Bank for the years 2022 to 2024. In addition to financial indicators, the study employs a survey to evaluate the bank’s Shariah compliance based on the standards of the Shariah Supervisory Board of the Central Bank of Libya. The study concludes that the National Commercial Bank demonstrates weaknesses across several SCAMEL indicators. One of the key recommendations is for the Central Bank to promote the adoption of a localized classification model for assessing the performance of commercial banks.