The Effect of Banking Expansion on Profit Efficiency of Saudi Banks

18 Pages Posted: 9 Oct 2010

Date Written: October 7, 2010

Abstract

This paper aims at analyzing the profit efficiency of the Saudi banks, and testing how it could be affected by banking expansion. This has been conducted using a sample of 6 commercial banks (out of 11), and covering the period from 1998 to 2007. Profit efficiency has been measured, using the ratio of actual profitability to the best one, which a similar bank (in size) can realize.

Tests indicated that we could accept hypotheses regarding the effects of "availability of phone banking", "number of ATMs" and "number of branches" on profit efficiency of Saudi banks, also referred to the need to reject the hypotheses regarding the effects of "number of POSs", "availability of PC banking" and "availability of mobile banking".

Keywords: profit efficiency, banking expansion

Suggested Citation

Alber, Nader, The Effect of Banking Expansion on Profit Efficiency of Saudi Banks (October 7, 2010). Available at SSRN: https://ssrn.com/abstract=1688939 or http://dx.doi.org/10.2139/ssrn.1688939

Nader Alber (Contact Author)

Ain Shams University ( email )

Cairo
Egypt

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