The CAMEL model, an acronym for Capital Adequacy, Asset Quality, Management Efficiency, Earnings, and Liquidity, is widely used to measure bank performance. By utilizing the CAMEL model as a framework, this thesis examines the performance evaluation of commercial banks in Taiwan. The primary objective of this study is to evaluate the financial soundness and stability of Taiwanese commercial banks by analyzing with CAMEL model. Additionally, it aims to identify the significant factors that impact bank performance in Taiwan. A comprehensive dataset comprising financial statements and relevant metrics from 48 commercial banks in Taiwan, with a specified period from 2018 to 2022, was collected from TEJ.
Based on the study’s findings, it is evident that capital adequacy has a substantial negative impact on the bank’s performance with the ratio of total liabilities to total equity. According to the risk-weighted capital ratio, all the commercial banks in Taiwan have followed the central bank’s regulations. Asset quality has a vital significance with NIM for both ratios. Management efficiency has a significant positive impact on the ROA and a significant negative impact on NIM with the measurement of operating expenses to total assets. Earning quality measured by interest income to net income significantly negatively impacts ROA and ROE. ROE is negatively impacted by the liquidity ratio measured by the total loans to total deposits; liquid assets to total deposits strongly negatively impact ROA. The size of the bank is strongly correlated with bank performance, while the age of the bank is not significantly correlated with bank performance.

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