The Relative Efficiency of Saudi Banks: Data Envelopment Analysis Models
The purpose of this study is to measure the relative efficiency of banks in Saudi Arabia using a basic DEA models like CCR and BCR. Also, it investigated the determinants of such efficiency in terms of bank size and capitalization. The duration of the measured performance of the Saudi banking sector is (2007-2011). The results indicate that, on a relative scale, Saudi banks were efficient in the management of their financial resources. In addition, it was found that efficiency score of the selected banks is high and stable over time and the management of the banks consistently improved their efficiency during the period. Another important result is that the relative efficiency of Saudi smaller banks significantly outperforms much better than medium and larger size banks. However, banks with higher capital adequacy ratio are less efficient. Thus, banks in Saudi Arabia with higher capital adequacy ratio are less risky, managing safer and lower-earning portfolios. This study provides a starting point for further investigation and validation into the efficiency of the Saudi banking sector; also it can provide important information for policy makers as for the openness of Saudi new banks. Therefore, more investigation with alternative models are required.
Volume (Year): 3 (2013)
Issue (Month): 3 (July)
|Contact details of provider:|| Web page: http://hrmars.com/index.php/pages/detail/Accounting-Finance-Journal|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
- Saeed Al-Muharrami, 2009. "The competition and market structure in the Saudi Arabia banking," Journal of Economic Studies, Emerald Group Publishing, vol. 36(5), pages 446-460, November.
When requesting a correction, please mention this item's handle: RePEc:hur:ijaraf:v:3:y:2013:i:3:p:152-161. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hassan Danial Aslam)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.